Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 06, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Information [Line Items] | ||
Entity Registrant Name | FLEXSHOPPER, INC. | |
Entity Central Index Key | 0001397047 | |
Entity File Number | 001-37945 | |
Entity Tax Identification Number | 20-5456087 | |
Entity Incorporation, State or Country Code | DE | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Contact Personnel [Line Items] | ||
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 | |
Entity Phone Fax Numbers [Line Items] | ||
City Area Code | (855) | |
Local Phone Number | 353-9289 | |
Entity Listings [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | FPAY | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 21,619,954 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
CURRENT ASSETS: | ||
Cash | $ 4,892,912 | $ 4,413,130 |
Lease receivables, net | 57,151,127 | 44,795,090 |
Loan receivables at fair value | 40,085,656 | 35,794,290 |
Prepaid expenses and other assets | 4,452,164 | 3,300,677 |
Lease merchandise, net | 25,856,542 | 29,131,440 |
Total current assets | 132,438,401 | 117,434,627 |
Property and equipment, net | 9,419,105 | 9,308,859 |
Right of use asset, net | 1,142,104 | 1,237,010 |
Intangible assets, net | 12,506,545 | 13,391,305 |
Other assets, net | 2,459,908 | 2,175,215 |
Deferred tax asset, net | 14,246,325 | 12,943,361 |
Total assets | 172,212,388 | 156,490,377 |
CURRENT LIABILITIES: | ||
Accounts payable | 3,811,310 | 7,139,848 |
Accrued payroll and related taxes | 381,929 | 578,197 |
Accrued expenses | 3,763,725 | 3,972,397 |
Lease liability - current portion | 263,111 | 245,052 |
Total current liabilities | 8,394,171 | 12,134,118 |
Loan payable under credit agreement to beneficial shareholder, net of unamortized issuance costs of $1,332,712 at June 30, 2024 and $70,780 at December 31, 2023 | 117,483,978 | 96,384,220 |
Loan payable under Basepoint credit agreement, net of unamortized issuance costs of $73,730 at June 30, 2024 and $92,964 at December 31, 2023 | 7,338,875 | 7,319,641 |
Lease liabilities, net of current portion | 1,184,683 | 1,321,578 |
Total liabilities | 144,731,149 | 127,259,604 |
STOCKHOLDERS’ EQUITY | ||
Common stock, $0.0001 par value - authorized 40,000,000 shares, issued 21,988,711 shares at June 30, 2024 and 21,752,304 shares at December 31, 2023 | 2,200 | 2,176 |
Treasury shares, at cost- 346,258 shares at June 30, 2024 and 164,029 shares at December 31, 2023 | (367,563) | (166,757) |
Additional paid in capital | 42,684,380 | 42,415,894 |
Accumulated deficit | (37,641,438) | (35,824,200) |
Total stockholders’ equity | 27,481,239 | 29,230,773 |
Total liabilities and stockholders' equity | 172,212,388 | 156,490,377 |
Related Party | ||
CURRENT LIABILITIES: | ||
Promissory notes to related parties, including accrued interest | 174,096 | 198,624 |
Promissory notes to related parties, net of unamortized issuance costs of $420,558 at June 30, 2024 and $649,953 at December 31, 2023 and net of current portion | 10,329,442 | 10,100,047 |
Series 1 Convertible Preferred Stock | ||
STOCKHOLDERS’ EQUITY | ||
Convertible preferred stock value | 851,660 | 851,660 |
Series 2 Convertible Preferred Stock | ||
STOCKHOLDERS’ EQUITY | ||
Convertible preferred stock value | $ 21,952,000 | $ 21,952,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Loan payable under credit agreement to beneficial shareholder, net of unamortized issuance costs (in Dollars) | $ 1,332,712 | $ 70,780 |
Loan payable under Basepoint credit agreement, net of unamortized issuance costs (in Dollars) | $ 73,730 | $ 92,964 |
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 | 21,988,711 | 21,752,304 |
Treasury shares | 346,258 | 164,029 |
Related Party | ||
Promissory note related to acquisition, net of discount (in Dollars) | $ 420,558 | $ 649,953 |
Series 1 Convertible Preferred Stock | ||
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 |
Convertible preferred stock, stated value (in Dollars) | $ 5 | $ 5 |
Series 2 Convertible Preferred Stock | ||
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 |
Convertible preferred stock, stated value (in Dollars) | $ 1,000 | $ 1,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenues: | ||||
Total revenues | $ 31,758,885 | $ 24,532,036 | $ 65,703,758 | $ 55,317,811 |
Costs and expenses: | ||||
Depreciation and impairment of lease merchandise | 13,848,925 | 14,485,417 | 28,534,788 | 29,831,205 |
Loan origination costs and fees | 896,040 | 1,655,424 | 1,717,867 | 3,489,051 |
Cost of retail revenues | 1,059,098 | 1,670,302 | ||
Marketing | 2,545,814 | 1,488,578 | 4,311,386 | 2,587,767 |
Salaries and benefits | 4,224,614 | 2,976,008 | 8,308,533 | 5,702,898 |
Operating expenses | 6,807,328 | 5,957,932 | 13,739,834 | 11,585,640 |
Total costs and expenses | 29,381,819 | 26,563,359 | 58,282,710 | 53,196,561 |
Operating income/ (loss) | 2,377,066 | (2,031,323) | 7,421,048 | 2,121,250 |
Interest expense including amortization of debt issuance costs | (5,226,155) | (4,568,557) | (10,541,249) | (9,099,884) |
Loss before income taxes | (2,849,089) | (6,599,880) | (3,120,201) | (6,978,634) |
Benefit from income taxes | 1,246,030 | 1,302,225 | 1,302,963 | 1,450,764 |
Net loss | (1,603,059) | (5,297,655) | (1,817,238) | (5,527,870) |
Dividends on Series 2 Convertible Preferred Shares | (1,091,742) | (992,493) | (2,161,198) | (1,964,726) |
Net loss attributable to common and Series 1 Convertible Preferred shareholders | $ (2,694,801) | $ (6,290,148) | $ (3,978,436) | $ (7,492,596) |
Basic and diluted loss per common share: | ||||
Basic (in Dollars per share) | $ (0.13) | $ (0.29) | $ (0.18) | $ (0.34) |
Diluted (in Dollars per share) | $ (0.13) | $ (0.29) | $ (0.18) | $ (0.34) |
WEIGHTED AVERAGE COMMON SHARES: | ||||
Basic (in Shares) | 21,469,720 | 21,752,304 | 21,527,869 | 21,751,807 |
Diluted (in Shares) | 21,469,720 | 21,752,304 | 21,527,869 | 21,751,807 |
Lease revenues and fees, net | ||||
Revenues: | ||||
Revenue from Contract with Customer | $ 27,074,048 | $ 22,906,843 | $ 52,907,784 | $ 47,621,001 |
Loan revenues and fees, net of changes in fair value | ||||
Revenues: | ||||
Revenue from Contract with Customer | 3,314,375 | 1,625,193 | 10,645,652 | 7,696,810 |
Retail revenues | ||||
Revenues: | ||||
Revenue from Contract with Customer | $ 1,370,462 | $ 2,150,322 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) | Series 1 Convertible Preferred Stock | Series 2 Convertible Preferred Stock | Common Stock | Treasury Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2022 | $ 851,660 | $ 21,952,000 | $ 2,176 | $ 39,819,420 | $ (31,590,583) | $ 31,034,673 | |
Balance (in Shares) at Dec. 31, 2022 | 170,332 | 21,952 | 21,750,804 | ||||
Provision for compensation expense related to stock-based compensation | 420,748 | 420,748 | |||||
Exercise of stock options into common stock | 1,185 | 1,185 | |||||
Exercise of stock options into common stock (in Shares) | 1,500 | ||||||
Net loss | (230,215) | (230,215) | |||||
Balance at Mar. 31, 2023 | $ 851,660 | $ 21,952,000 | $ 2,176 | 40,241,353 | (31,820,798) | 31,226,391 | |
Balance (in Shares) at Mar. 31, 2023 | 170,332 | 21,952 | 21,752,304 | ||||
Balance at Dec. 31, 2022 | $ 851,660 | $ 21,952,000 | $ 2,176 | 39,819,420 | (31,590,583) | $ 31,034,673 | |
Balance (in Shares) at Dec. 31, 2022 | 170,332 | 21,952 | 21,750,804 | ||||
Exercise of stock options into common stock (in Shares) | 1,500 | ||||||
Net loss | $ (5,527,870) | ||||||
Balance at Jun. 30, 2023 | $ 851,660 | $ 21,952,000 | $ 2,176 | 41,602,734 | (37,118,453) | 27,290,117 | |
Balance (in Shares) at Jun. 30, 2023 | 170,332 | 21,952 | 21,752,304 | ||||
Balance at Mar. 31, 2023 | $ 851,660 | $ 21,952,000 | $ 2,176 | 40,241,353 | (31,820,798) | 31,226,391 | |
Balance (in Shares) at Mar. 31, 2023 | 170,332 | 21,952 | 21,752,304 | ||||
Provision for compensation expense related to stock-based compensation | 443,800 | 443,800 | |||||
Extension of warrants | 917,581 | 917,581 | |||||
Net loss | (5,297,655) | (5,297,655) | |||||
Balance at Jun. 30, 2023 | $ 851,660 | $ 21,952,000 | $ 2,176 | 41,602,734 | (37,118,453) | 27,290,117 | |
Balance (in Shares) at Jun. 30, 2023 | 170,332 | 21,952 | 21,752,304 | ||||
Balance at Dec. 31, 2023 | $ 851,660 | $ 21,952,000 | $ 2,176 | $ (166,757) | 42,415,894 | (35,824,200) | 29,230,773 |
Balance (in Shares) at Dec. 31, 2023 | 170,332 | 21,952 | 21,752,304 | 164,029 | |||
Provision for compensation expense related to stock-based compensation | 217,125 | 217,125 | |||||
Purchases of treasury stock | $ (6,098) | (6,098) | |||||
Purchases of treasury stock (in Shares) | 5,418 | ||||||
Net loss | (214,179) | (214,179) | |||||
Balance at Mar. 31, 2024 | $ 851,660 | $ 21,952,000 | $ 2,176 | $ (172,855) | 42,633,019 | (36,038,379) | 29,227,621 |
Balance (in Shares) at Mar. 31, 2024 | 170,332 | 21,952 | 21,752,304 | 169,447 | |||
Balance at Dec. 31, 2023 | $ 851,660 | $ 21,952,000 | $ 2,176 | $ (166,757) | 42,415,894 | (35,824,200) | $ 29,230,773 |
Balance (in Shares) at Dec. 31, 2023 | 170,332 | 21,952 | 21,752,304 | 164,029 | |||
Exercise of stock options into common stock (in Shares) | |||||||
Net loss | $ (1,817,238) | ||||||
Balance at Jun. 30, 2024 | $ 851,660 | $ 21,952,000 | $ 2,200 | $ (367,563) | 42,684,380 | (37,641,438) | 27,481,239 |
Balance (in Shares) at Jun. 30, 2024 | 170,332 | 21,952 | 21,988,711 | 346,258 | |||
Balance at Mar. 31, 2024 | $ 851,660 | $ 21,952,000 | $ 2,176 | $ (172,855) | 42,633,019 | (36,038,379) | 29,227,621 |
Balance (in Shares) at Mar. 31, 2024 | 170,332 | 21,952 | 21,752,304 | 169,447 | |||
Provision for compensation expense related to stock-based compensation | 154,873 | 154,873 | |||||
Vesting of performance share units, net of share withheld for employee taxes | $ 24 | (103,512) | (103,488) | ||||
Vesting of performance share units, net of share withheld for employee taxes (in Shares) | 236,407 | ||||||
Purchases of treasury stock | $ (194,708) | (194,708) | |||||
Purchases of treasury stock (in Shares) | 176,811 | ||||||
Net loss | (1,603,059) | (1,603,059) | |||||
Balance at Jun. 30, 2024 | $ 851,660 | $ 21,952,000 | $ 2,200 | $ (367,563) | $ 42,684,380 | $ (37,641,438) | $ 27,481,239 |
Balance (in Shares) at Jun. 30, 2024 | 170,332 | 21,952 | 21,988,711 | 346,258 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,817,238) | $ (5,527,870) |
Adjustments to reconcile net loss to net cash (used in)/ provided by operating activities: | ||
Depreciation and impairment of lease merchandise | 28,534,788 | 29,831,205 |
Other depreciation and amortization | 4,698,213 | 3,710,703 |
Amortization of debt issuance costs | 509,797 | 182,174 |
Amortization of discount on the promissory note related to acquisition | 118,476 | |
Compensation expense related to stock-based compensation | 371,998 | 864,548 |
Provision for doubtful accounts | 17,290,476 | 22,085,828 |
Deferred income tax | (1,302,963) | (1,457,740) |
Net changes in the fair value of loans receivables at fair value | (4,898,876) | 837,048 |
Changes in operating assets and liabilities: | ||
Lease receivables | (29,646,513) | (25,773,184) |
Loans receivables at fair value | 607,510 | 6,990,410 |
Prepaid expenses and other assets | (1,208,258) | 412,391 |
Lease merchandise | (25,259,890) | (22,878,600) |
Purchase consideration payable related to acquisition | 208,921 | |
Lease liabilities | (19,329) | (12,243) |
Accounts payable | (3,328,538) | (2,506,724) |
Accrued payroll and related taxes | (196,268) | (11,079) |
Accrued expenses | (233,202) | (1,603,202) |
Net cash (used in)/ provided by operating activities | (15,898,293) | 5,471,062 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment, including capitalized software costs | (3,207,307) | (3,114,534) |
Purchases of data costs | (944,313) | (343,428) |
Net cash used in investing activities | (4,151,620) | (3,457,962) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from loan payable under credit agreement | 22,361,690 | 2,750,000 |
Repayment of loan payable under credit agreement | (2,795,000) | |
Repayment of loan payable under Basepoint credit agreement | (1,500,000) | |
Debt issuance related costs | (1,523,100) | (115,403) |
Proceeds from exercise of stock options | 1,185 | |
Principal payment under finance lease obligation | (4,601) | (4,917) |
Repayment of purchase consideration payable related to acquisition | (143,330) | |
Tax payments associated with equity-based compensation transactions | (103,488) | |
Purchase of treasury stock | (200,806) | |
Net cash provided by/ (used in) financing activities | 20,529,695 | (1,807,465) |
INCREASE IN CASH | 479,782 | 205,635 |
CASH, beginning of period | 4,413,130 | 6,173,349 |
CASH, end of period | 4,892,912 | 6,378,984 |
Supplemental cash flow information: | ||
Interest paid | 9,414,926 | 8,453,511 |
Noncash investing and financing activities | ||
Due date extension of warrants | $ 917,581 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2024 | |
Basis of Presentation [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The unaudited condensed consolidated 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, 2023 filed with the SEC on April 1, 2024. The condensed consolidated balance sheet as of December 31, 2023 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. Certain prior year/period amounts have been reclassified to conform to the current year presentation. |
Business
Business | 6 Months Ended |
Jun. 30, 2024 | |
Business [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, owns 100% of FlexLending, LLC, a Delaware limited liability company, and owns 100% of Flex Revolution, LLC, a Delaware limited liability company. The Company is a holding corporation with no operations except for those conducted by its subsidiaries FlexShopper, LLC, FlexLending, LLC and Flex Revolution, LLC. In January 2015, in connection with the Credit Agreement entered in March 2015 (see Note 8), 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, LLC provides durable goods to consumers on a lease-to-own basis (“LTO”). 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. FlexShopper, LLC also sells products to other lenders that offer finance options in FlexShopper’s website. FlexLending, LLC participates in a consumer finance program offered by a third-party bank partner. The third-party originates unsecured consumer loans through strategic sales channels. Under this program, FlexLending, LLC purchases a participation interest in each of the loans originated by the third-party. Flex Revolution, LLC operates a direct origination model for consumers in 11 states. In the direct origination model, applicants who apply and obtain a loan through our platform are underwritten, approved, and funded directly by the Company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - Estimates - Segment Information Cash and Cash Equivalents – Lease Revenue Recognition Retail Revenue Recognition Lease Receivables and Allowance for Doubtful Accounts - June 30, December 31, Lease receivables $ 90,159,481 $ 64,749,918 Allowance for doubtful accounts (33,008,354 ) (19,954,828 ) Lease receivables, net $ 57,151,127 $ 44,795,090 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. Lease receivables balances charged off against the allowance were $2,230,263 and $4,236,950 for the three and six months ended June 30, 2024, respectively, and $13,757,036 and $32,728,807 for the three and six months ended June 30, 2023, respectively. Six Months Year Ended Beginning balance $ 19,954,828 $ 13,078,800 Provision 17,290,476 42,505,647 Accounts written off (4,236,950 ) (35,629,619 ) Ending balance $ 33,008,354 $ 19,954,828 Lease Merchandise, net The net lease merchandise balances consisted of the following as of June 30, 2024 and December 31, 2023: June 30, December 31, Lease merchandise at cost $ 48,811,580 $ 49,687,498 Accumulated depreciation and impairment reserve (22,955,038 ) (20,556,058 ) Lease merchandise, net $ 25,856,542 $ 29,131,440 Loan receivables at fair value – Interest and fees are discontinued when loan receivables become contractually 90 or more days past due. The Company charges-off loans at the earlier of when the loans are determined to be uncollectible or when the loans are 90 days contractually past due. Recoveries on loan receivables that were previously charged off are recognized when cash is received. Changes in the fair value of loan receivables include the impact of current period charge offs associated with these receivables. The Company estimates the fair value of the loan receivables using a discounted cash flow analysis at an individual loan level to more accurately predict future payments. The Company adjusts expected cash flows for estimated losses and servicing costs over the estimated duration of the underlying assets. These adjustments are determined using historical data and include appropriate consideration of recent trends and anticipated future performance. Future cash flows are discounted using a rate of return that the Company believes a market participant would require. Model results may be adjusted by management if the Company does not believe the output reflects the fair value of the instrument, as defined under U.S. GAAP. The models are updated at each measurement date to capture any changes in internal factors such as nature, term, volume, payment trends, remaining time to maturity, and portfolio mix, as well as changes in underwriting or observed trends expected to impact future performance. Further details concerning loan receivables at fair value are presented within “Fair Value Measurement” section in this Note. Net changes in the fair value of loan receivables included in the consolidated statements of operations in the line “loan revenues and fees, net of changes in fair value” was a gain of $687,479 and $4,898,876 for the three and six months ended June 30, 2024, respectively, and a loss of $1,821,700 and $837,048 for the three and six months ended June 30, 2023, respectively. Lease Accounting Three Months ended Six Months ended 2024 2023 2024 2023 Lease billings and accruals $ 34,686,893 $ 32,501,656 $ 69,971,769 $ 66,756,740 Provision for doubtful accounts (7,806,427 ) (10,847,413 ) (17,290,476 ) (22,085,828 ) Gain on sale of lease receivables 28,525 1,252,600 61,434 2,950,089 Lease placement collections 165,057 - 165,057 - Lease revenues and fees $ 27,074,048 $ 22,906,843 $ 52,907,784 $ 47,621,001 Deferred Debt Issuance Costs - Debt issuance costs incurred in conjunction with the subordinated Promissory Notes to related parties 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 $114,698 and $229,395 for the three and six months ended June 30, 2024, respectively, and $38,233 and $38,233 for the three and six months ended June 30, 2023, respectively. Debt issuance costs incurred in conjunction with the Basepoint Credit Agreement entered into on June 7, 2023 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 $9,617 and $19,234 for the three and six months ended June 30, 2024, respectively was $3,206 and $3,206 for the three and six months ended June 30, 2023, respectively. Intangible Assets – In the Revolution Transaction, the Company identified intangible assets for the franchisee contract-based agreements, the related non-compete agreements, the Liberty Loan brand, the non-contractual customer relationships associated with the corporate locations and the list of previous customers. The franchisee contract-based agreements relate to the assignment of agreements with Liberty Tax franchisees in which their locations and staff are used to assist in the origination and servicing of a loan portfolio in exchange for a share of the net revenue. In addition, there is non-compete embedded in these agreements. The Liberty Loan brand intangible asset relates to the value associated with the established brands acquired in the transaction that would otherwise need to be licensed. The non-contractual customer relationship intangible asset is the value of the customer relationships for the corporate stores acquired in the transaction. The customer list intangible asset relates to the value of valuable customers information that will be used to market additional products. The franchisee contract-based agreement, the Liberty Loan brand and the non-compete intangible assets are amortized on a straight-line basis over the expected useful life of the assets of ten years. The non-contractual customer relationship intangible asset is amortized on a straight-line basis over a five-year estimated useful life. The customer list is amortized on a straight-line basis over a three-year estimated useful life. For intangible assets with finite lives, tests for impairment must be performed if conditions exist that indicate the carrying amount may not be recoverable. Intangible assets amortization expense was $442,426 and $884,760 for the three and six months ended June 30, 2024, respectively, and $443,059 and $886,118 for the three and six months ended June 30, 2023, respectively. Property and Equipment - Software Costs Data Costs Capitalized data costs amounted to $479,871 and $944,313 for the three and six months ended June 30, 2024, respectively, and $174,346 and $343,428 for the three and six months ended June 30, 2023, respectively. Capitalized data costs amortization expense was $378,951 and $716,392 for the three and six months ended June 30, 2024, respectively, and $234,417 and $454,167 for the three and six months ended June 30, 2023, respectively. Capitalized data costs net of its amortization are included in the condensed consolidated balance sheets in Other assets, net. Impairment of Long-Lived Assets Operating Expenses - Marketing Costs - Per Share Data - Basic earnings per common share is computed by dividing net income/(loss) available to common shareholders reduced by any dividends paid or declared on common and participating Series 1 Convertible Preferred Stock by the total of the weighted average number of common shares outstanding during the period. 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, performance share units and warrants. The dilutive effect of Series 2 Convertible Preferred Stock is computed using the if-converted method. The dilutive effect of options, performance share units and warrants are 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, performance share units and warrants will have a dilutive effect when the average price of common stock during the period exceeds the exercise price of options, performance share units 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. The following table reflects the number of common shares issuable upon conversion or exercise. June 30, 2024 2023 Series 1 Convertible Preferred Stock 225,231 225,231 Series 2 Convertible Preferred Stock 5,845,695 5,845,695 Common Stock Options 4,397,447 5,435,572 Common Stock Warrants 2,255,184 2,255,184 Performance Share Units 937,499 1,250,000 13,661,056 15,011,682 The following table sets forth the computation of basic and diluted earnings per common share for the six months ended June 30, 2024 and 2023: Six Months ended June 30, 2024 2023 Numerator Net loss $ (1,817,238 ) $ (5,527,870 ) Series 2 Convertible Preferred Stock dividends (2,161,198 ) (1,964,726 ) Net loss attributable to common and Series 1 Convertible Preferred Stock (3,978,436 ) (7,492,596 ) Net income attributable to Series 1 Convertible Preferred Stock - - Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock - - Net loss attributable to common shares- Numerator for basic EPS (3,978,436 ) $ (7,492,596 ) Effect of dilutive securities: Series 2 Convertible Preferred Stock dividends - - Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS (3,978,436 ) (7,492,596 ) Denominator Weighted average of common shares outstanding- Denominator for basic EPS 21,527,869 21,751,807 Effect of dilutive securities: Series 2 Convertible Preferred Stock - - Series 1 Convertible Preferred Stock - - Common stock options and performance share units - - Common stock warrants - - Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS 21,527,869 21,751,807 Basic EPS $ (0.18 ) $ (0.34 ) Diluted EPS $ (0.18 ) $ (0.34 ) The following table sets forth the computation of basic and diluted earnings per common share for the three months ended June 30, 2024 and 2023: Three Months ended June 30, 2024 2023 Numerator Net loss $ (1,603,059 ) $ (5,297,655 ) Series 2 Convertible Preferred Stock dividends (1,091,742 ) (992,493 ) Net loss attributable to common and Series 1 Convertible Preferred Stock (2,694,801 ) (6,290,148 ) Net income attributable to Series 1 Convertible Preferred Stock - - Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock - - Net loss attributable to common shares- Numerator for basic EPS (2,694,801 ) (6,290,148 ) Effect of dilutive securities: Series 2 Convertible Preferred Stock dividends - - Net loss attributable to common shares after assumed conversions – Numerator for diluted EPS $ (2,694,801 ) $ (6,290,148 ) Denominator Weighted average of common shares outstanding- Denominator for basic EPS 21,469,720 21,752,304 Effect of dilutive securities Series 2 Convertible Preferred Stock - - Series 1 Convertible Preferred Stock - - Common stock options and performance share units - - Common stock warrants - - Adjusted weighted average of common shares outstanding and assumed conversions- Denominator for diluted EPS 21,469,720 21,752,304 Basic EPS $ (0.13 ) $ (0.29 ) Diluted EPS $ (0.13 ) $ (0.29 ) Stock-Based Compensation – Compensation expense for stock options is determined by reference to the fair value of an award on the date of grant and is recognized 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. Compensation expense for performance share units is recognized on an accelerated basis over the vesting period based on the Company’s projected assessment of the level of performance that will be achieved and earned. The fair value of performance share units is based on the fair market value of the Company’s common stock on the date of grant (see Note 10). Fair Value of Financial Instruments The Company utilizes the fair value option on its entire loan receivables portfolio purchased from its bank partner and for the portfolio of loans directly acquired in the state licensed model. Fair Value Measurements- ● Level 1: Quoted prices in active markets for identical assets or liabilities. ● Level 2: Inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable. ● Level 3: Unobservable inputs for the asset or liability measured. Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. The Company’s financial instruments that are measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 is as follows: Fair Value Measurement Using Carrying Financial instruments – As of June 30, 2024 (1) Level 1 Level 2 Level 3 Amount Loan receivables at fair value $ - $ - $ 40,085,656 $ 48,618,482 Fair Value Measurement Using Carrying Financial instruments – As of December 31, 2023 (1) Level 1 Level 2 Level 3 Amount Loan receivables at fair value $ - $ - $ 35,794,290 $ 48,076,705 (1) For cash, lease receivable, and accounts payable the carrying amount is a reasonable estimate of fair value due to their short-term nature. The carrying value of loans payable under the Credit Agreement, the carrying value of loans payable under Basepoint Credit Agreement, and the carrying value of promissory notes to related parties approximates fair value based upon their interest rates, which approximate current market interest rates. The Company primarily estimates the fair value of its loan receivables portfolio using discounted cash flow models. The models use inputs, such as estimated losses, servicing costs and discount rates, that are unobservable but reflect the Company’s best estimates of the assumptions a market participant would use to calculate fair value. Certain unobservable inputs may, in isolation, have either a directionally consistent or opposite impact on the fair value of the financial instrument for a given change in that input. An increase to the net loss rate, servicing cost, or discount rate would decrease the fair value of the Company’s loan receivables. When multiple inputs are used within the valuation techniques for loan receivables, a change in one input in a certain direction may be offset by an opposite change from another input. The Company estimates the fair value of the promissory note related to acquisition using the discounted cash flow model. The model uses inputs including estimated cash flows and a discount rate. The following describes the primary inputs to the discounted cash flow models that require significant judgement: ● Estimated losses are estimates of the principal payments that will not be repaid over the life of the loans, net of the expected principal recoveries on charged-off receivables. FlexShopper systems monitor collections and portfolio performance data that are used to continually refine the analytical models and statistical measures used in making marketing and underwriting decisions. Leveraging the data at the core of the business, the Company utilizes the models to estimate lifetime credit losses for loan receivables. Inputs to the models include expected cash flows, historical and current performance, and behavioral information. Management may also incorporate discretionary adjustments based on the Company’s expectations of future credit performance. ● Servicing costs – Servicing costs applied to the expected cash flows of the portfolio reflect the Company estimate of the amount investors would incur to service the underlying assets for the remainder of their lives. Servicing costs are derived from the Company internal analysis of our cost structure considering the characteristics of the receivables and have been benchmarked against observable information on comparable assets in the marketplace. ● Discount rates – the discount rates utilized in the cash flow analyses reflect the Company estimates of the rates of return that investors would require when investing in financial instruments with similar risk and return characteristics. For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents a reconciliation of the beginning and ending balances for the six months ended June 30, 2024 and the year ended December 31, 2023: Six Months Year Ended Beginning balance $ 35,794,290 $ 32,932,504 Purchases of loan participation 1,058,998 389,949 Obligation of loan participation - (12,931 ) Loan originations 26,200,446 57,554,746 Interest and fees (1) 5,746,776 14,801,188 Collections (32,554,732 ) (80,089,020 ) Net charge off (1) (2,411,225 ) (11,041,155 ) Net change in fair value (1) 6,251,103 21,259,009 Ending balance $ 40,085,656 $ 35,794,290 (1) Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statements of operations For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents quantitative information about the inputs used in the fair value measurement as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Minimum Maximum Weighted (2) Minimum Maximum Weighted Estimated losses (1) 0 % 92.4 % 21.4 % 0 % 92.5 % 28.9 % Servicing costs - - 4.4 % - - 4.7 % Discount rate - - 20.5 % - - 20.1 % (1) Figure disclosed as a percentage of outstanding principal balance. (2) Unobservable inputs were weighted by outstanding principal balance, which are grouped by origination channel. Other relevant data as of June 30, 2024 and December 31, 2023 concerning loan receivables at fair value are as follows: June 30, December 31, Aggregate fair value of loan receivables that are 90 days or more past due $ 33,104,613 $ 27,828,083 Unpaid principal balance of loan receivables that are 90 days or more past due 42,613,754 41,208,009 Aggregate fair value of loan receivables in non-accrual status 33,119,327 27,764,926 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 June 30, 2024, 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. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
LEASES | 4. LEASES Refer to Note 3 to these condensed 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 as a lessor. Lease Commitments 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 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, which was September 18, 2019. In September 2021, FlexShopper entered into a 12-month lease for an office space for approximately 18 people at the Battery at SunTrust Park at Georgia, Atlanta mainly to expand the sales team. This lease was renewed for another twelve-month period with a monthly rent of approximately $8,800. This lease is accounted for under the practical expedient for leases with initial terms for 12 months or less, and as such no related right of use asset or liability was recorded. As part of the Revolution Transaction (See Note 14), 22 storefront lease agreements were acquired by FlexShopper. Some of those stores were closed or transferred to franchisees after the Revolution Transaction. As of June 30, 2024, 34 storefront lease agreements belong to FlexShopper. The stores are located in Alabama, Idaho, Michigan, Mississippi, Nevada, and Oklahoma and are used to offer finance products to customers. The monthly average rent for these stores is approximately $1,800 per month. These leases are accounted for under the practical expedient for leases with initial terms for 12 months or less, and as such no related right of use asset or liability was recorded. The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are included in the Company’s condensed consolidated balance sheets within the Right of use asset, net, Lease liability- current portion and Lease liabilities, net of current portion. Supplemental balance sheet information related to leases is as follows: Balance Sheet Classification June 30, December 31, Assets Operating Lease Asset Right of use asset, net $ 1,142,104 $ 1,233,538 Finance Lease Asset Right of use asset, net - 3,472 Total Lease Assets $ 1,142,104 $ 1,237,010 Liabilities Operating Lease Liability – current portion Current Lease Liabilities $ 263,104 $ 240,444 Finance Lease Liability – current portion Current Lease Liabilities 7 4,608 Operating Lease Liability – net of current portion Long Term Lease Liabilities 1,184,683 1,321,578 Total Lease Liabilities $ 1,447,794 $ 1,566,630 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 % 4 Finance Leases 13.39 % - Operating lease expense is recognized on a straight-line basis over the lease term within operating expenses in the Company’s condensed consolidated statements of operations. Finance lease expense is recognized over the lease term within interest expense and amortization in the Company’s condensed consolidated statements of operations. The Company’s total operating and finance lease expense all relate to lease costs amounted to $98,993 and $198,097 for the three and six months ended June 30, 2024, respectively, and $97,367 and $194,623 for the three and six months ended June 30, 2023, respectively. Supplemental cash flow information related to operating leases is as follows: Six Months ended June 30, 2024 2023 Cash payments for operating leases $ 212,938 $ 206,736 Cash payments for finance leases 4,782 4,782 Below is a summary of undiscounted operating lease liabilities as of June 30, 2024. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the operating lease liabilities included in the condensed consolidated balance sheet. Operating 2024 217,197 2025 443,038 2026 456,330 2027 470,019 2028 and thereafter 303,574 Total undiscounted cash flows 1,890,158 Less: interest (442,371 ) Present value of lease liabilities $ 1,447,787 Below is a summary of undiscounted finance lease liabilities as of June 30, 2024. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance lease liabilities included in the condensed consolidated balance sheet. Finance 2024 7 Total undiscounted cash flows 7 Less: interest - Present value of lease liabilities $ 7 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2024 | |
Property and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Property and equipment consist of the following: Estimated June 30, December 31, Furniture, fixtures and vehicle 2-5 years $ 395,867 $ 395,868 Website and internal use software 3 years 28,291,589 25,786,321 Computers and software 3-7 years 5,465,155 4,763,115 34,152,611 30,945,304 Less: accumulated depreciation and amortization (24,733,506 ) (21,636,445 ) $ 9,419,105 $ 9,308,859 Depreciation and amortization expense for property and equipment was $1,561,352 and $3,097,061 for the three and six months ended June 30, 2024, respectively, and $1,207,069 and $2,370,418 for the three and six months ended June 30, 2023, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2024 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | 6. INTANGIBLE ASSETS The following table provides a summary of our intangible assets: June 30, 2024 Estimated Useful Life Gross Accumulated Amortization Net Patent 10 years $ 30,760 $ (30,760 ) $ - Franchisee contract-based agreements 10 years 12,744,367 (2,017,840 ) 10,726,527 Liberty Loan brand 10 years 340,218 (53,823 ) 286,395 Non-compete agreements 10 years 86,113 (13,752 ) 72,361 Non contractual customer relationships 5 years 1,952,371 (618,396 ) 1,333,975 Customer list 3 years 184,825 (97,538 ) 87,287 $ 15,338,654 $ (2,832,109 ) $ 12,506,545 December 31, 2023 Estimated Gross Accumulated Amortization Net Patent 10 years $ 30,760 $ (30,760 ) $ - Franchisee contract-based agreements 10 years 12,744,367 (1,380,638 ) 11,363,729 Liberty Loan brand 10 years 340,218 (36,855 ) 303,363 Non-compete agreements 10 years 86,113 (9,334 ) 76,779 Non contractual customer relationships 5 years 1,952,371 (423,020 ) 1,529,351 Customer list 3 years 184,825 (66,742 ) 118,083 $ 15,338,654 $ (1,947,349 ) $ 13,391,305 Depreciation and amortization expense for intangible assets was $442,426 and $884,760 for the three and six months ended June 30, 2024, respectively, and $443,059 and $886,118 for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following table: Amortization 2024 (six months remaining) 884,580 2025 1,764,026 2026 1,707,552 2027 1,675,012 2028 1,317,072 Total $ 7,348,242 |
Promissory Notes-Related Partie
Promissory Notes-Related Parties | 6 Months Ended |
Jun. 30, 2024 | |
Promissory Notes-Related Parties [Abstract] | |
PROMISSORY NOTES-RELATED PARTIES | 7. PROMISSORY NOTES-RELATED PARTIES 122 Partners Note- Interest paid for the 122 Partner Note was $53,346 and $105,988 for the three and six months ended June 30, 2023, respectively. Interest expensed for the 122 Partner Note $53,346 and $105,022 for the three and six months ended June 30, 2023, respectively. NRNS Note- On June 29, 2023, the Company, the Promissory Note Borrower, NRNS, Mr. Heiser and PITA Holdings, LLC (“PITA”) entered into an Amendment to Subordinated Debt and Warrants to Purchase Common Stock (the “Amendment”), pursuant to which, among other things, the parties agreed to extend the maturity date of the NRNS Note from July 1, 2024 to July 1, 2025. In order to induce NRNS to enter into the Amendment, the Company extended the expiration date of certain warrants (See Note 9). The cost of the warrant modification was $917,581 and was recorded as a deferred debt cost of NRNS note. No other changes were made to such NRNS Note. Interest paid for the NRNS Note was $547,717 and $1,130,537 for the three and six months ended June 30, 2024, respectively, and $573,466 and $1,139,375 for the three and six months ended June 30, 2023, respectively. Interest expensed for the NRNS Note was $523,415 and $1,106,010 for the three and six months ended June 30, 2024, respectively, and $573,466 and $1,128,987 for the three and six months ended June 30, 2023, respectively. Amounts payable under the promissory notes are as follows: Debt Interest 2024 $ - $ 174,096 2025 $ 10,750,000 $ - |
Loan Payable Under Credit Agree
Loan Payable Under Credit Agreement | 6 Months Ended |
Jun. 30, 2024 | |
Loan Payable Under Credit Agreement [Abstract] | |
LOAN PAYABLE UNDER CREDIT AGREEMENT | 8. 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”). On September 2022, WE 2014-1, LLC assigned 100% of its Commitments and all Loans to Powerscourt Investments 32, LP, an affiliate of Waterfall Asset Management, LLC. The interest rate charged on amounts borrowed was SOFR plus 11% per annum. The Commitment Termination Date was April 1, 2024. On March 27, 2024, the Company refinanced all the obligations under the Credit Agreement owed to the Administrative Agent and the Lenders, and all liens held by any of the Lenders, or the Administrative Agent were discharged and released. The Administrative Agent, the Lenders and the Company terminated the Credit Agreement. On March 27, 2024, FlexShopper, through a wholly-owned subsidiary (“Borrower”), entered into a new credit agreement (the “2024 Credit Agreement”) with Computershare Trust Company, National Association as paying agent, various lenders from time to time party thereto and Powerscourt Investment 50, LP, an affiliate of Waterfall Asset Management, LLC, as administrative agent and lender (“Lender”). The Borrower is permitted to borrow funds under the 2024 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 2024 Credit Agreement) less certain deductions described in the 2024 Credit Agreement. Under the terms of the 2024 Credit Agreement, subject to the satisfaction of certain conditions, the Borrower may borrow up to $150,000,000 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 Commitment Termination Date is April 1, 2026. The Lender was granted a security interest in certain leases and loans as collateral under this Agreement. The interest rate charged on amounts borrowed is SOFR plus 9% per annum. The Company will pay the Lender a fee in an amount equal to 1% of the aggregate Commitments as of March 27, 2024, payable in 12 monthly installments on each interest payment date commencing April 2024. At June 30, 2024, amounts borrowed bear interest at 14.44%. The 2024 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 2024 Credit Agreement includes covenants requiring FlexShopper to maintain a minimum amount of Equity Book Value, Liquidity and Cash, and maintain a certain ratio of Consolidated Total Debt to Equity Book Value (each capitalized term, as defined in the 2024 Credit Agreement). Upon a Permitted Change of Control, FlexShopper must refinance the debt under the 2024 Credit Agreement, subject to the payment of an early termination fee. A summary of the covenant requirements, and FlexShopper’s actual results at June 30, 2024, follows: June 30, 2024 Required Actual Equity Book Value not less than $ 16,452,246 $ 27,481,239 Liquidity greater than 3,500,000 10,346,383 Cash greater than 2,500,000 4,892,912 Consolidated Total Debt to Equity Book Value ratio not to exceed 5.25 4.72 The 2024 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 2024 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 2024 Credit Agreement and related documents (including certain financial and expense covenants), deficiencies in the borrowing base, certain judgments against FlexShopper and bankruptcy events. The Company borrowed under the Credit Agreement $11,750,000 and $22,361,690 for the three and six months ended June 30, 2024, respectively, and $0 and $2,750,000 for the three and six months ended June 30, 2023, respectively. The Company repaid under the Credit Agreement and $0 and $0 for the three and six months ended June 30, 2024, respectively, and $220,000 and $2,795,000 for the three and six months ended June 30, 2023, respectively. Interest expense incurred under the Credit Agreement amounted to $4,137,318 and $8,422,665 for the three and six months ended June 30, 2024, respectively, and $3,332,686 and $6,611,523 for the three and six months ended June 30, 2023, respectively. The outstanding balance under the Credit Agreement was $118,816,690 as of June 30, 2024 and was $96,455,000 as of December 31, 2023. Such amount is presented in the condensed consolidated balance sheets net of unamortized issuance costs of $1,332,712 and $70,780 as of June 30, 2024 and December 31, 2023, respectively. Interest is payable monthly on the outstanding balance of the amounts borrowed. No principal is expected to be repaid in the next twelve months due to the Commitment Termination Date having been extended to April 1, 2026, or from reductions in the borrowing base. The Company must repay all borrowed amounts one year after the Commitment Termination Date. Accordingly, all principal is shown as a non-current liability at June 30, 2024. |
Capital Structure
Capital Structure | 6 Months Ended |
Jun. 30, 2024 | |
Capital Structure [Abstract] | |
CAPITAL STRUCTURE | 9. 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 June 30, 2024, 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 June 30, 2024, 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 June 30, 2024 totaled $25,349,212. As of June 30, 2024, 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. As the dividends for the Series 2 Preferred Shares have not been declared by the Company’s Board of Directors, there is no dividends accrual reflected in the Company’s Consolidated Financial Statement. The Series 2 Preferred Shares dividends is reflected on the Consolidated Statement of Operations for purposes of determining the net income attributable to common and Series 1 Convertible Preferred shareholders. 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 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 “Conversion Warrants”). The original expiration date of these warrants was September 28, 2023 (and extended as described below). From January 2019 to August 2021, the Company issued to PITA Holdings, LLC (“PITA”) Common Stock Purchase Warrants (the “Consulting Warrants”) to purchase up to an aggregate of 1,200,000 shares of the Company’s common stock in connection with that certain Consulting Agreement, dated as of February 19, 2019 (as may be amended from time to time), between the Company and XLR8 Capital Partners LLC (“XLR8”). PITA, NRNS and XLR8 are affiliates of the Company. On June 29, 2023, the Company, FlexShopper, LLC, NRNS, Mr. Heiser and PITA entered into an Amendment to Subordinated Debt and Warrants to Purchase Common Stock (the “Amendment”), pursuant to which, among other things, the parties agreed to extend the maturity date of the NRNS Note from July 1, 2024 to July 1, 2025. In order to induce NRNS to enter into the Amendment, the expiration date of the Conversion Warrants and the expiration date date of 840,000 of the Consulting Warrants was extended 30 months from the original expiration date. The cost of the warrant modification was $917,581 and was recorded as a deferred debt cost of NRNS note. There was expense related to warrants during the three and six months ended June 30, 2024, and the expense related to warrants was $917,581 and $917,581 for the three and six months ended June 30, 2023, respectively. The following table summarizes information about outstanding stock warrants as of June 30, 2024 and December 31, 2023, all of which are exercisable: Exercise Common Stock Warrants Weighted Average Remaining Contractual Life Price Outstanding June 30, 2024 Dec 31, 2023 $ 1.25 1,055,184 2 years 2 years $ 1.25 160,000 2 years 2 years $ 1.34 40,000 2 years 2 years $ 1.40 40,000 2 years 2 years $ 1.54 40,000 2 years 2 years $ 1.62 40,000 2 years 2 years $ 1.68 40,000 2 years 2 years $ 1.69 40,000 2 years 2 years $ 1.74 40,000 2 years 2 years $ 1.76 40,000 2 years 2 years $ 1.91 40,000 2 years 2 years $ 1.95 40,000 2 years 2 years $ 2.00 40,000 2 years 2 years $ 2.01 40,000 2 years 2 years $ 2.08 40,000 2 years 2 years $ 2.45 40,000 2 years 2 years $ 2.53 40,000 2 years 2 years $ 2.57 40,000 2 years 2 years $ 2.70 40,000 1 years 2 years $ 2.78 40,000 2 years 2 years $ 2.79 40,000 1 years 2 years $ 2.89 40,000 3 years 4 years $ 2.93 40,000 2 years 2 years $ 2.97 40,000 1 years 2 years $ 3.09 40,000 3 years 3 years $ 3.17 40,000 3 years 4 years $ 3.19 40,000 1 years 2 years $ 3.27 40,000 1 years 2 years 2,255,184 |
Equity Compensation Plans
Equity Compensation Plans | 6 Months Ended |
Jun. 30, 2024 | |
Equity Compensation Plans [Abstract] | |
EQUITY COMPENSATION PLANS | 10. EQUITY COMPENSATION PLANS In April 2018, the Company adopted the FlexShopper, Inc. 2018 Omnibus Equity Compensation Plan (the “2018 Plan”). 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. Grants under the 2018 Plan and the Prior Plans consist of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units, 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. As June 30, 2024, approximately 2,150,000 shares remained available for issuance under the 2018 plan. Stock-based compensation expense included the following components: Three Months ended Six Months ended 2024 2023 2024 2023 Stock options $ 80,463 $ 384,396 $ 160,907 $ 805,144 Performance share units 74,410 59,404 211,091 59,404 Total stock-based compensation $ 154,873 $ 443,800 $ 371,998 $ 864,548 The fair value of stock-based compensation is recognized as compensation expense over the vesting period. Compensation expense recorded for stock-based compensation in the condensed consolidated statements of operations was $154,873 and $371,998 for the three and six months ended June 30, 2024, respectively, and $443,800 and $864,548 for the three and six months ended June 30, 2023, respectively. Unrecognized compensation cost related to non-vested options and PSU at June 30, 2024 amounted to $809,543, which is expected to be recognized over a weighted average period of 1.84 years. Stock options: The fair value of stock options is recognized as compensation expense using the straight-line method over the vesting period. The Company measured the fair value of each stock option award on the date of grant using the Black-Scholes-Merton (BSM). The Company did not grant stock options during the six months ended June 30, 2024. The weighted average assumptions used for the stock options granted during the six months ended June 30, 2023 were as follows: Six Months Exercise price $ 0.79 Expected life 6 years Expected volatility 96 % Dividend yield 0 % Risk-free interest rate 3.54 % 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, 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. Activity in stock options for the six month periods ended June 30, 2024 and June 30, 2023 was as follows: Number of Weighted Weighted Aggregate Outstanding at January 1, 2024 4,452,447 $ 1.57 $ 2,152,602 Granted - Exercised/Released - Expired (55,000 ) 8.00 - Outstanding at June 30, 2024 4,397,447 $ 1.49 6.93 $ 1,118,281 Vested and exercisable at June 30, 2024 3,661,778 $ 1.56 6.71 $ 855,491 Outstanding at January 1, 2023 3,919,228 $ 1.97 $ 52,223 Granted 1,517,844 0.79 75 Exercised (1,500 ) 0.79 345 Outstanding at June 30, 2023 5,435,572 $ 1.64 7.27 $ 1,102,624 Vested and exercisable at June 30, 2023 4,049,004 $ 1.84 6.66 $ 580,962 The weighted average grant date fair value of options granted during the six month period ended June 30, 2023 was $0.60 per share. Performance Share Units: On February 10, 2022, and on April 21, 2023, the Compensation Committee of the Board of Directors approved awards of performance share units to certain senior executives of the Company (the “2022 PSU” and the “2023 PSU”, respectively). For performance share units, which are settled in stock, the number of shares earned is subject to both performance and time-based vesting. For the performance component, the number of shares earned is determined at the end of the periods based upon achievement of specified performance conditions such as the Company’s Adjusted EBITDA. When the performance criteria are met, the award is earned and vests assuming continued employment through the specified service period(s). Shares are issued from the Company’s 2018 Omnibus Equity Compensation Plan upon vesting. The number of 2023 PSU which could potentially be issued ranges from 0 up to a maximum of 1,250,000 of the target awards depending on the specified terms and conditions of the target award. The fair value of performance share units is based on the fair market value of the Company’s common stock on the date of grant. The compensation expense associated with these awards is amortized on an accelerated basis over the vesting period based on the Company’s projected assessment of the level of performance that will be achieved and earned. In the event the Company determines it is no longer probable that the minimum performance criteria specified in the plan will be achieved, all previously recognized compensation expense is reversed in the period such a determination is made. The 2022 PSU were forfeited in April 2023 as the minimum performance component was not achieved. For the 2023 PSU, the Company determined it was probable that the minimum performance component would be met and accordingly commenced amortization in the quarter ended June 30, 2023. In April 2024, 1,250,000 shares of the 2023 PSU were earned as the performance criteria was met and 312,501 shares were vested. Activity in performance share units for the six months ended June 30, 2024 and June 30, 2023 was as follows: Number of Weighted Non- vested at January 1, 2024 1,250,000 $ 0.78 Exercised/Released (312,501 ) 0.78 Non- vested at June 30, 2024 937,499 $ 0.78 Non- vested at January 1, 2023 790,327 $ 1.53 Granted 1,250,000 0.78 Forfeited/ unearned (790,327 ) 1.53 Non- vested at June 30, 2023 1,250,000 $ 0.78 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Taxes [Abstract] | |
INCOME TAXES | 11. INCOME TAXES Effective income tax rates for interim periods are based on the Company’s estimate of the applicable annual income tax rate. The Company’s effective income tax rate varies based upon the estimate of the Company’s 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 months ended June 30, 2024 was approximately 41.76%. This was different than the expected federal income tax rate of 21% primarily due to the impact of non-deductible expenses, equity compensation and state income taxes. The realization of the deferred tax asset as of June 30, 2024 is more likely than not based on the Company’s projected taxable income. |
Contingencies and Other Uncerta
Contingencies and Other Uncertainties | 6 Months Ended |
Jun. 30, 2024 | |
Contingencies and Other Uncertainties [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. Litigation The Company is not involved in any current or pending material litigation. The Company could be involved in litigation incidental to the operation of the business. The Company intends to vigorously defend all matters in which the Company is named defendants, and, for insurable losses, maintain significant levels of insurance to protect against adverse judgments, claims or assessments that may affect the Company. Although the adequacy of existing insurance coverage of the outcome of any legal proceedings cannot be predicted with certainty, based on the current information available, the Company does not believe the ultimate liability associated with known claims or litigation, if any, in which the Company is involved will materially affect the Company’s consolidated financial condition or results of operations. Employment agreements Certain executive management entered into employment agreements with the Company. The contracts are for a period of three years and renew for three successive one-year terms unless receipt of written notices by the parties. The contracts provide that such management may earn discretionary cash bonuses and equity awards, based on financial performance metrics defined each year by the Compensation Committee of the Company’s Board of Directors. Additionally, under certain termination conditions, such contracts provide for severance payments and other benefits. COVID-19 and other similar health crisis The Company has been, and may in the future, be impacted by COVID-19 or any similar pandemic or health crisis, and this could affect our results of operations, financial condition, or cash flow in the future. The extent and the effects of the impact of any of these events on the operation and financial performance of our business depend on several factors which are highly uncertain and cannot be predicted. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2024 | |
Commitments [Abstract] | |
COMMITMENTS | 13. COMMITMENTS The Company does not have any commitments other than real property leases (Note 4). |
Revolution Transaction
Revolution Transaction | 6 Months Ended |
Jun. 30, 2024 | |
Revolution Transaction [Abstract] | |
REVOLUTION TRANSACTION | 14. REVOLUTION TRANSACTION On December 3, 2022, Flex Revolution, LLC, a wholly-owned subsidiary of FlexShopper, Inc. (the “Buyer”) closed a transaction (“Revolution Transaction”) pursuant to an Asset Purchase Agreement with Revolution Financial, Inc., a provider of consumer loans and credit products (collectively with certain of its subsidiaries, “Revolution”), under which the Company acquired the material net assets of the Revolution business. In consideration for the sale of the Revolution net assets, the Company issued an adjustable promissory note (“Seller Note”) with an initial principal amount of $5,000,000. The Seller Note matures on December 1, 2027, bears interest at 8% per annum and is subject to adjustment based upon the pre-tax net income of the acquired business in 2023. The fair value of the Seller Note as of the acquisition date was $3,421,991. The Revolution Transaction includes the Buyer’s assumption of Revolution’s consumer loan portfolio, related cash and its credit facility (“Revolution Credit Facility”) as this facility is backed by the portfolio acquired. On June 7, 2023, the Revolution Credit Facility was legally transferred to FlexShopper (See Note 15). The parties to the Asset Purchase Agreement have each made customary representations and warranties in the Asset Purchase Agreement and have agreed to indemnify each other for breaches of such representations and warranties. The Buyer’s primary recourse in the event of a claim is to offset the Seller Note equal to the indemnifiable losses subject to such claim. The Revolution Transaction has been accounted for as a business combination in accordance with ASC 805, Business Combination. The Company measured the net assets acquired in Revolution Transaction at fair value on the acquisition date. The fair value of the intangible assets was determined primarily by using discounted cash flow models. The models use inputs including estimated cash flows and a discount rate. The Company recorded a bargain purchase gain of $14,461,274 related to the Revolution Transaction at acquisition date as the fair value of the net assets acquired exceed the fair value of the purchase price consideration. The Company believes that the most significant reason its management was able to negotiate a bargain purchase was due to the speed with which the seller wanted to close this transaction which resulted in a non-competitive process akin to a forced sale. The strong desire for a prior to year-end closing was for various reasons, including potential credit facility covenant issues and accelerating operating losses after recent regulatory changes. On December 31, 2023, the promissory note related to acquisition was adjusted based upon the pre-tax loss of the acquired business in 2023 and based on this the Company recognized in the year ended December 31, 2023 a positive net change in fair value of promissory note related to acquisition of $3,678,689. |
Basepoint Credit Agreement
Basepoint Credit Agreement | 6 Months Ended |
Jun. 30, 2024 | |
Basepoint Credit Agreement [Abstract] | |
BASEPOINT CREDIT AGREEMENT | 15. BASEPOINT CREDIT AGREEMENT On June 7, 2023, the Company, through a wholly owned subsidiary, Flex Revolution, LLC (the “New Borrower”) entered into a Joinder Agreement to a credit agreement (the “Basepoint Credit Agreement”) with Revolution Financial, Inc. (the “Existing Borrower”), the subsidiary guarantors party thereto, the lenders party thereto, the individual guarantor party and BP Fundco, LLC, as administrative agent. The Existing Borrower with certain of its subsidiaries (collectively, the “Seller”) and Flex Revolution, LLC (the “Buyer”) entered into an Asset Purchase Agreement (See Note 14), pursuant to which the Seller agreed to, among other things, transfer substantially all of its assets to the Buyer. In the Basepoint Credit Agreement, the New Borrower agreed to become a borrower (the “Borrower”) and a grantor as applicable under the agreement. The Company is a guarantor of the Basepoint Credit Agreement. The Basepoint Credit Agreement provides for an up to a $20 million credit facility for the origination of consumer loans. The credit facility is backed by eligible principal balance of eligible consumer receivable of the borrower’s portfolio (the “Borrowing Base”). The annual interest rate on loans under the Basepoint Credit Agreement is 13.42%. The principal balance outstanding under the Basepoint Credit Agreement is due on June 7, 2026. The Basepoint Credit Agreement includes covenants requiring the Borrower and the guarantor to maintain a minimum amount of liquidity that is no less than 5% of the current Borrowing Base and maintain a minimum amount of cash held in the concentration accounts of $ 200,0000 The Basepoint 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 Basepoint Credit Agreement, breaches of representations, warranties or certifications made by or on behalf of the borrower in the Basepoint Credit Agreement and related documents (including certain covenants), deficiencies in the Borrowing Base, certain judgments against the borrower and bankruptcy events. Interest expense incurred under the Basepoint Credit Agreement amounted to $251,614 and $503,501 for the three and six months ended June 30, 2024, respectively. The outstanding balance under the Basepoint Credit Agreement was $7,412,605 as of June 30, 2024. Such amount is presented in the consolidated balance sheets net of unamortized issuance costs of $73,730 as of June 30, 2024. Interest is payable weekly on the outstanding balance of the amounts borrowed. No principal is expected to be repaid in the next twelve months, or from reductions in the borrowing base. Accordingly, all principal is shown as a non-current liability at June 30, 2024. |
Employee Benefit Plan
Employee Benefit Plan | 6 Months Ended |
Jun. 30, 2024 | |
Employee Benefit Plan [Abstract] | |
EMPLOYEE BENEFIT PLAN | 16. EMPLOYEE BENEFIT PLAN The Company sponsors an employee retirement savings plan that qualifies under Section 401(k) of the Internal Revenue Code. Participating employees may contribute, but not more than statutory limits. The Company makes nondiscretionary 4% Safe Harbor contributions of participants’ eligible earnings who have completed the plan’s eligibility requirements. The contributions are made to the plan on behalf of the employees. Total contributions to the plan were $48,109 and $97,816 for the three and six months ended June 30, 2024, respectively, and $36,601 and $86,762 for the three and six months ended June 30, 2023, respectively. |
Share Repurchase Program
Share Repurchase Program | 6 Months Ended |
Jun. 30, 2024 | |
Share Repurchase Program [Abstract] | |
SHARE REPURCHASE PROGRAM | 17. SHARE REPURCHASE PROGRAM On May 17, 2023, the Board of Directors authorized a share repurchase program to acquire up to $2 million of the Company’s common stock. The Company may purchase common stock on the open market, through privately negotiated transactions, or by other means including through the use of trading plans intended to qualify under Rule 10b-18 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The share repurchase program will have a term of 18 months and may be suspended or discontinued at any time and does not obligate the company to acquire any amount of common stock. The Company purchased under the share repurchase program 182,229 shares of common stock for a net cost of $200,806 for the six months ended June 30, 2024. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||||
Net Income (Loss) | $ (1,603,059) | $ (214,179) | $ (5,297,655) | $ (230,215) | $ (1,817,238) | $ (5,527,870) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation - |
Estimates | Estimates - |
Segment Information | Segment Information |
Cash and Cash Equivalents | Cash and Cash Equivalents – |
Lease Revenue Recognition | Lease Revenue Recognition |
Retail Revenue Recognition | Retail Revenue Recognition |
Lease Receivables and Allowance for Doubtful Accounts | Lease Receivables and Allowance for Doubtful Accounts - June 30, December 31, Lease receivables $ 90,159,481 $ 64,749,918 Allowance for doubtful accounts (33,008,354 ) (19,954,828 ) Lease receivables, net $ 57,151,127 $ 44,795,090 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. Lease receivables balances charged off against the allowance were $2,230,263 and $4,236,950 for the three and six months ended June 30, 2024, respectively, and $13,757,036 and $32,728,807 for the three and six months ended June 30, 2023, respectively. Six Months Year Ended Beginning balance $ 19,954,828 $ 13,078,800 Provision 17,290,476 42,505,647 Accounts written off (4,236,950 ) (35,629,619 ) Ending balance $ 33,008,354 $ 19,954,828 |
Lease Merchandise, net | Lease Merchandise, net The net lease merchandise balances consisted of the following as of June 30, 2024 and December 31, 2023: June 30, December 31, Lease merchandise at cost $ 48,811,580 $ 49,687,498 Accumulated depreciation and impairment reserve (22,955,038 ) (20,556,058 ) Lease merchandise, net $ 25,856,542 $ 29,131,440 |
Loan receivables at fair value | Loan receivables at fair value – Interest and fees are discontinued when loan receivables become contractually 90 or more days past due. The Company charges-off loans at the earlier of when the loans are determined to be uncollectible or when the loans are 90 days contractually past due. Recoveries on loan receivables that were previously charged off are recognized when cash is received. Changes in the fair value of loan receivables include the impact of current period charge offs associated with these receivables. The Company estimates the fair value of the loan receivables using a discounted cash flow analysis at an individual loan level to more accurately predict future payments. The Company adjusts expected cash flows for estimated losses and servicing costs over the estimated duration of the underlying assets. These adjustments are determined using historical data and include appropriate consideration of recent trends and anticipated future performance. Future cash flows are discounted using a rate of return that the Company believes a market participant would require. Model results may be adjusted by management if the Company does not believe the output reflects the fair value of the instrument, as defined under U.S. GAAP. The models are updated at each measurement date to capture any changes in internal factors such as nature, term, volume, payment trends, remaining time to maturity, and portfolio mix, as well as changes in underwriting or observed trends expected to impact future performance. Further details concerning loan receivables at fair value are presented within “Fair Value Measurement” section in this Note. Net changes in the fair value of loan receivables included in the consolidated statements of operations in the line “loan revenues and fees, net of changes in fair value” was a gain of $687,479 and $4,898,876 for the three and six months ended June 30, 2024, respectively, and a loss of $1,821,700 and $837,048 for the three and six months ended June 30, 2023, respectively. |
Lease Accounting | Lease Accounting Three Months ended Six Months ended 2024 2023 2024 2023 Lease billings and accruals $ 34,686,893 $ 32,501,656 $ 69,971,769 $ 66,756,740 Provision for doubtful accounts (7,806,427 ) (10,847,413 ) (17,290,476 ) (22,085,828 ) Gain on sale of lease receivables 28,525 1,252,600 61,434 2,950,089 Lease placement collections 165,057 - 165,057 - Lease revenues and fees $ 27,074,048 $ 22,906,843 $ 52,907,784 $ 47,621,001 |
Deferred Debt Issuance Costs | Deferred Debt Issuance Costs - Debt issuance costs incurred in conjunction with the subordinated Promissory Notes to related parties 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 $114,698 and $229,395 for the three and six months ended June 30, 2024, respectively, and $38,233 and $38,233 for the three and six months ended June 30, 2023, respectively. Debt issuance costs incurred in conjunction with the Basepoint Credit Agreement entered into on June 7, 2023 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 $9,617 and $19,234 for the three and six months ended June 30, 2024, respectively was $3,206 and $3,206 for the three and six months ended June 30, 2023, respectively. |
Intangible Assets | Intangible Assets – In the Revolution Transaction, the Company identified intangible assets for the franchisee contract-based agreements, the related non-compete agreements, the Liberty Loan brand, the non-contractual customer relationships associated with the corporate locations and the list of previous customers. The franchisee contract-based agreements relate to the assignment of agreements with Liberty Tax franchisees in which their locations and staff are used to assist in the origination and servicing of a loan portfolio in exchange for a share of the net revenue. In addition, there is non-compete embedded in these agreements. The Liberty Loan brand intangible asset relates to the value associated with the established brands acquired in the transaction that would otherwise need to be licensed. The non-contractual customer relationship intangible asset is the value of the customer relationships for the corporate stores acquired in the transaction. The customer list intangible asset relates to the value of valuable customers information that will be used to market additional products. The franchisee contract-based agreement, the Liberty Loan brand and the non-compete intangible assets are amortized on a straight-line basis over the expected useful life of the assets of ten years. The non-contractual customer relationship intangible asset is amortized on a straight-line basis over a five-year estimated useful life. The customer list is amortized on a straight-line basis over a three-year estimated useful life. For intangible assets with finite lives, tests for impairment must be performed if conditions exist that indicate the carrying amount may not be recoverable. Intangible assets amortization expense was $442,426 and $884,760 for the three and six months ended June 30, 2024, respectively, and $443,059 and $886,118 for the three and six months ended June 30, 2023, respectively. |
Property and Equipment | Property and Equipment - |
Software Costs | Software Costs |
Data Costs | Data Costs Capitalized data costs amounted to $479,871 and $944,313 for the three and six months ended June 30, 2024, respectively, and $174,346 and $343,428 for the three and six months ended June 30, 2023, respectively. Capitalized data costs amortization expense was $378,951 and $716,392 for the three and six months ended June 30, 2024, respectively, and $234,417 and $454,167 for the three and six months ended June 30, 2023, respectively. Capitalized data costs net of its amortization are included in the condensed consolidated balance sheets in Other assets, net. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
Operating Expenses | Operating Expenses - |
Marketing Costs | Marketing Costs - |
Per Share Data | Per Share Data - Basic earnings per common share is computed by dividing net income/(loss) available to common shareholders reduced by any dividends paid or declared on common and participating Series 1 Convertible Preferred Stock by the total of the weighted average number of common shares outstanding during the period. 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, performance share units and warrants. The dilutive effect of Series 2 Convertible Preferred Stock is computed using the if-converted method. The dilutive effect of options, performance share units and warrants are 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, performance share units and warrants will have a dilutive effect when the average price of common stock during the period exceeds the exercise price of options, performance share units 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. The following table reflects the number of common shares issuable upon conversion or exercise. June 30, 2024 2023 Series 1 Convertible Preferred Stock 225,231 225,231 Series 2 Convertible Preferred Stock 5,845,695 5,845,695 Common Stock Options 4,397,447 5,435,572 Common Stock Warrants 2,255,184 2,255,184 Performance Share Units 937,499 1,250,000 13,661,056 15,011,682 The following table sets forth the computation of basic and diluted earnings per common share for the six months ended June 30, 2024 and 2023: Six Months ended June 30, 2024 2023 Numerator Net loss $ (1,817,238 ) $ (5,527,870 ) Series 2 Convertible Preferred Stock dividends (2,161,198 ) (1,964,726 ) Net loss attributable to common and Series 1 Convertible Preferred Stock (3,978,436 ) (7,492,596 ) Net income attributable to Series 1 Convertible Preferred Stock - - Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock - - Net loss attributable to common shares- Numerator for basic EPS (3,978,436 ) $ (7,492,596 ) Effect of dilutive securities: Series 2 Convertible Preferred Stock dividends - - Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS (3,978,436 ) (7,492,596 ) Denominator Weighted average of common shares outstanding- Denominator for basic EPS 21,527,869 21,751,807 Effect of dilutive securities: Series 2 Convertible Preferred Stock - - Series 1 Convertible Preferred Stock - - Common stock options and performance share units - - Common stock warrants - - Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS 21,527,869 21,751,807 Basic EPS $ (0.18 ) $ (0.34 ) Diluted EPS $ (0.18 ) $ (0.34 ) The following table sets forth the computation of basic and diluted earnings per common share for the three months ended June 30, 2024 and 2023: Three Months ended June 30, 2024 2023 Numerator Net loss $ (1,603,059 ) $ (5,297,655 ) Series 2 Convertible Preferred Stock dividends (1,091,742 ) (992,493 ) Net loss attributable to common and Series 1 Convertible Preferred Stock (2,694,801 ) (6,290,148 ) Net income attributable to Series 1 Convertible Preferred Stock - - Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock - - Net loss attributable to common shares- Numerator for basic EPS (2,694,801 ) (6,290,148 ) Effect of dilutive securities: Series 2 Convertible Preferred Stock dividends - - Net loss attributable to common shares after assumed conversions – Numerator for diluted EPS $ (2,694,801 ) $ (6,290,148 ) Denominator Weighted average of common shares outstanding- Denominator for basic EPS 21,469,720 21,752,304 Effect of dilutive securities Series 2 Convertible Preferred Stock - - Series 1 Convertible Preferred Stock - - Common stock options and performance share units - - Common stock warrants - - Adjusted weighted average of common shares outstanding and assumed conversions- Denominator for diluted EPS 21,469,720 21,752,304 Basic EPS $ (0.13 ) $ (0.29 ) Diluted EPS $ (0.13 ) $ (0.29 ) |
Stock-Based Compensation | Stock-Based Compensation – Compensation expense for stock options is determined by reference to the fair value of an award on the date of grant and is recognized 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. Compensation expense for performance share units is recognized on an accelerated basis over the vesting period based on the Company’s projected assessment of the level of performance that will be achieved and earned. The fair value of performance share units is based on the fair market value of the Company’s common stock on the date of grant (see Note 10). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company utilizes the fair value option on its entire loan receivables portfolio purchased from its bank partner and for the portfolio of loans directly acquired in the state licensed model. |
Fair Value Measurements | Fair Value Measurements- ● Level 1: Quoted prices in active markets for identical assets or liabilities. ● Level 2: Inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable. ● Level 3: Unobservable inputs for the asset or liability measured. Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. The Company’s financial instruments that are measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 is as follows: Fair Value Measurement Using Carrying Financial instruments – As of June 30, 2024 (1) Level 1 Level 2 Level 3 Amount Loan receivables at fair value $ - $ - $ 40,085,656 $ 48,618,482 Fair Value Measurement Using Carrying Financial instruments – As of December 31, 2023 (1) Level 1 Level 2 Level 3 Amount Loan receivables at fair value $ - $ - $ 35,794,290 $ 48,076,705 (1) For cash, lease receivable, and accounts payable the carrying amount is a reasonable estimate of fair value due to their short-term nature. The carrying value of loans payable under the Credit Agreement, the carrying value of loans payable under Basepoint Credit Agreement, and the carrying value of promissory notes to related parties approximates fair value based upon their interest rates, which approximate current market interest rates. The Company primarily estimates the fair value of its loan receivables portfolio using discounted cash flow models. The models use inputs, such as estimated losses, servicing costs and discount rates, that are unobservable but reflect the Company’s best estimates of the assumptions a market participant would use to calculate fair value. Certain unobservable inputs may, in isolation, have either a directionally consistent or opposite impact on the fair value of the financial instrument for a given change in that input. An increase to the net loss rate, servicing cost, or discount rate would decrease the fair value of the Company’s loan receivables. When multiple inputs are used within the valuation techniques for loan receivables, a change in one input in a certain direction may be offset by an opposite change from another input. The Company estimates the fair value of the promissory note related to acquisition using the discounted cash flow model. The model uses inputs including estimated cash flows and a discount rate. The following describes the primary inputs to the discounted cash flow models that require significant judgement: ● Estimated losses are estimates of the principal payments that will not be repaid over the life of the loans, net of the expected principal recoveries on charged-off receivables. FlexShopper systems monitor collections and portfolio performance data that are used to continually refine the analytical models and statistical measures used in making marketing and underwriting decisions. Leveraging the data at the core of the business, the Company utilizes the models to estimate lifetime credit losses for loan receivables. Inputs to the models include expected cash flows, historical and current performance, and behavioral information. Management may also incorporate discretionary adjustments based on the Company’s expectations of future credit performance. ● Servicing costs – Servicing costs applied to the expected cash flows of the portfolio reflect the Company estimate of the amount investors would incur to service the underlying assets for the remainder of their lives. Servicing costs are derived from the Company internal analysis of our cost structure considering the characteristics of the receivables and have been benchmarked against observable information on comparable assets in the marketplace. ● Discount rates – the discount rates utilized in the cash flow analyses reflect the Company estimates of the rates of return that investors would require when investing in financial instruments with similar risk and return characteristics. For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents a reconciliation of the beginning and ending balances for the six months ended June 30, 2024 and the year ended December 31, 2023: Six Months Year Ended Beginning balance $ 35,794,290 $ 32,932,504 Purchases of loan participation 1,058,998 389,949 Obligation of loan participation - (12,931 ) Loan originations 26,200,446 57,554,746 Interest and fees (1) 5,746,776 14,801,188 Collections (32,554,732 ) (80,089,020 ) Net charge off (1) (2,411,225 ) (11,041,155 ) Net change in fair value (1) 6,251,103 21,259,009 Ending balance $ 40,085,656 $ 35,794,290 (1) Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statements of operations For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents quantitative information about the inputs used in the fair value measurement as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Minimum Maximum Weighted (2) Minimum Maximum Weighted Estimated losses (1) 0 % 92.4 % 21.4 % 0 % 92.5 % 28.9 % Servicing costs - - 4.4 % - - 4.7 % Discount rate - - 20.5 % - - 20.1 % (1) Figure disclosed as a percentage of outstanding principal balance. (2) Unobservable inputs were weighted by outstanding principal balance, which are grouped by origination channel. Other relevant data as of June 30, 2024 and December 31, 2023 concerning loan receivables at fair value are as follows: June 30, December 31, Aggregate fair value of loan receivables that are 90 days or more past due $ 33,104,613 $ 27,828,083 Unpaid principal balance of loan receivables that are 90 days or more past due 42,613,754 41,208,009 Aggregate fair value of loan receivables in non-accrual status 33,119,327 27,764,926 |
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 June 30, 2024, 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of Lease Receivables Balances | The lease receivables balances consisted of the following as of June 30, 2024 and December 31, 2023: June 30, December 31, Lease receivables $ 90,159,481 $ 64,749,918 Allowance for doubtful accounts (33,008,354 ) (19,954,828 ) Lease receivables, net $ 57,151,127 $ 44,795,090 |
Schedule of Lease Receivables Balances Charged Off Against the Allowance | Six Months Year Ended Beginning balance $ 19,954,828 $ 13,078,800 Provision 17,290,476 42,505,647 Accounts written off (4,236,950 ) (35,629,619 ) Ending balance $ 33,008,354 $ 19,954,828 |
Schedule of Net Lease Merchandise Balances | The net lease merchandise balances consisted of the following as of June 30, 2024 and December 31, 2023: June 30, December 31, Lease merchandise at cost $ 48,811,580 $ 49,687,498 Accumulated depreciation and impairment reserve (22,955,038 ) (20,556,058 ) Lease merchandise, net $ 25,856,542 $ 29,131,440 |
Schedule of Lessor Revenues and Fees | The breakout of lease revenues and fees, net of lessor bad debt expense, that ties to the consolidated statements of operations is shown below: Three Months ended Six Months ended 2024 2023 2024 2023 Lease billings and accruals $ 34,686,893 $ 32,501,656 $ 69,971,769 $ 66,756,740 Provision for doubtful accounts (7,806,427 ) (10,847,413 ) (17,290,476 ) (22,085,828 ) Gain on sale of lease receivables 28,525 1,252,600 61,434 2,950,089 Lease placement collections 165,057 - 165,057 - Lease revenues and fees $ 27,074,048 $ 22,906,843 $ 52,907,784 $ 47,621,001 |
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise | The following table reflects the number of common shares issuable upon conversion or exercise. June 30, 2024 2023 Series 1 Convertible Preferred Stock 225,231 225,231 Series 2 Convertible Preferred Stock 5,845,695 5,845,695 Common Stock Options 4,397,447 5,435,572 Common Stock Warrants 2,255,184 2,255,184 Performance Share Units 937,499 1,250,000 13,661,056 15,011,682 |
Schedule of Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share for the six months ended June 30, 2024 and 2023: Six Months ended June 30, 2024 2023 Numerator Net loss $ (1,817,238 ) $ (5,527,870 ) Series 2 Convertible Preferred Stock dividends (2,161,198 ) (1,964,726 ) Net loss attributable to common and Series 1 Convertible Preferred Stock (3,978,436 ) (7,492,596 ) Net income attributable to Series 1 Convertible Preferred Stock - - Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock - - Net loss attributable to common shares- Numerator for basic EPS (3,978,436 ) $ (7,492,596 ) Effect of dilutive securities: Series 2 Convertible Preferred Stock dividends - - Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS (3,978,436 ) (7,492,596 ) Denominator Weighted average of common shares outstanding- Denominator for basic EPS 21,527,869 21,751,807 Effect of dilutive securities: Series 2 Convertible Preferred Stock - - Series 1 Convertible Preferred Stock - - Common stock options and performance share units - - Common stock warrants - - Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS 21,527,869 21,751,807 Basic EPS $ (0.18 ) $ (0.34 ) Diluted EPS $ (0.18 ) $ (0.34 ) Three Months ended June 30, 2024 2023 Numerator Net loss $ (1,603,059 ) $ (5,297,655 ) Series 2 Convertible Preferred Stock dividends (1,091,742 ) (992,493 ) Net loss attributable to common and Series 1 Convertible Preferred Stock (2,694,801 ) (6,290,148 ) Net income attributable to Series 1 Convertible Preferred Stock - - Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock - - Net loss attributable to common shares- Numerator for basic EPS (2,694,801 ) (6,290,148 ) Effect of dilutive securities: Series 2 Convertible Preferred Stock dividends - - Net loss attributable to common shares after assumed conversions – Numerator for diluted EPS $ (2,694,801 ) $ (6,290,148 ) Denominator Weighted average of common shares outstanding- Denominator for basic EPS 21,469,720 21,752,304 Effect of dilutive securities Series 2 Convertible Preferred Stock - - Series 1 Convertible Preferred Stock - - Common stock options and performance share units - - Common stock warrants - - Adjusted weighted average of common shares outstanding and assumed conversions- Denominator for diluted EPS 21,469,720 21,752,304 Basic EPS $ (0.13 ) $ (0.29 ) Diluted EPS $ (0.13 ) $ (0.29 ) |
Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis | The Company’s financial instruments that are measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 is as follows: Fair Value Measurement Using Carrying Financial instruments – As of June 30, 2024 (1) Level 1 Level 2 Level 3 Amount Loan receivables at fair value $ - $ - $ 40,085,656 $ 48,618,482 Fair Value Measurement Using Carrying Financial instruments – As of December 31, 2023 (1) Level 1 Level 2 Level 3 Amount Loan receivables at fair value $ - $ - $ 35,794,290 $ 48,076,705 (1) For cash, lease receivable, and accounts payable the carrying amount is a reasonable estimate of fair value due to their short-term nature. The carrying value of loans payable under the Credit Agreement, the carrying value of loans payable under Basepoint Credit Agreement, and the carrying value of promissory notes to related parties approximates fair value based upon their interest rates, which approximate current market interest rates. |
Schedule of Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation | For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents a reconciliation of the beginning and ending balances for the six months ended June 30, 2024 and the year ended December 31, 2023: Six Months Year Ended Beginning balance $ 35,794,290 $ 32,932,504 Purchases of loan participation 1,058,998 389,949 Obligation of loan participation - (12,931 ) Loan originations 26,200,446 57,554,746 Interest and fees (1) 5,746,776 14,801,188 Collections (32,554,732 ) (80,089,020 ) Net charge off (1) (2,411,225 ) (11,041,155 ) Net change in fair value (1) 6,251,103 21,259,009 Ending balance $ 40,085,656 $ 35,794,290 (1) Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statements of operations |
Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement | For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents quantitative information about the inputs used in the fair value measurement as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Minimum Maximum Weighted (2) Minimum Maximum Weighted Estimated losses (1) 0 % 92.4 % 21.4 % 0 % 92.5 % 28.9 % Servicing costs - - 4.4 % - - 4.7 % Discount rate - - 20.5 % - - 20.1 % (1) Figure disclosed as a percentage of outstanding principal balance. (2) Unobservable inputs were weighted by outstanding principal balance, which are grouped by origination channel. |
Schedule of Concerning Loan Receivables at Fair Value | Other relevant data as of June 30, 2024 and December 31, 2023 concerning loan receivables at fair value are as follows: June 30, December 31, Aggregate fair value of loan receivables that are 90 days or more past due $ 33,104,613 $ 27,828,083 Unpaid principal balance of loan receivables that are 90 days or more past due 42,613,754 41,208,009 Aggregate fair value of loan receivables in non-accrual status 33,119,327 27,764,926 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases is as follows: Balance Sheet Classification June 30, December 31, Assets Operating Lease Asset Right of use asset, net $ 1,142,104 $ 1,233,538 Finance Lease Asset Right of use asset, net - 3,472 Total Lease Assets $ 1,142,104 $ 1,237,010 Liabilities Operating Lease Liability – current portion Current Lease Liabilities $ 263,104 $ 240,444 Finance Lease Liability – current portion Current Lease Liabilities 7 4,608 Operating Lease Liability – net of current portion Long Term Lease Liabilities 1,184,683 1,321,578 Total Lease Liabilities $ 1,447,794 $ 1,566,630 |
Schedule of Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term | 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 % 4 Finance Leases 13.39 % - |
Schedule of Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases is as follows: Six Months ended June 30, 2024 2023 Cash payments for operating leases $ 212,938 $ 206,736 Cash payments for finance leases 4,782 4,782 |
Schedule of Undiscounted Operating Lease Liabilities | Below is a summary of undiscounted operating lease liabilities as of June 30, 2024. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the operating lease liabilities included in the condensed consolidated balance sheet. Operating 2024 217,197 2025 443,038 2026 456,330 2027 470,019 2028 and thereafter 303,574 Total undiscounted cash flows 1,890,158 Less: interest (442,371 ) Present value of lease liabilities $ 1,447,787 |
Schedule of Undiscounted Finance Lease Liabilities | Below is a summary of undiscounted finance lease liabilities as of June 30, 2024. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance lease liabilities included in the condensed consolidated balance sheet. Finance 2024 7 Total undiscounted cash flows 7 Less: interest - Present value of lease liabilities $ 7 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Property and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: Estimated June 30, December 31, Furniture, fixtures and vehicle 2-5 years $ 395,867 $ 395,868 Website and internal use software 3 years 28,291,589 25,786,321 Computers and software 3-7 years 5,465,155 4,763,115 34,152,611 30,945,304 Less: accumulated depreciation and amortization (24,733,506 ) (21,636,445 ) $ 9,419,105 $ 9,308,859 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Intangible Assets [Abstract] | |
Schedule of Intangible Assets | The following table provides a summary of our intangible assets: June 30, 2024 Estimated Useful Life Gross Accumulated Amortization Net Patent 10 years $ 30,760 $ (30,760 ) $ - Franchisee contract-based agreements 10 years 12,744,367 (2,017,840 ) 10,726,527 Liberty Loan brand 10 years 340,218 (53,823 ) 286,395 Non-compete agreements 10 years 86,113 (13,752 ) 72,361 Non contractual customer relationships 5 years 1,952,371 (618,396 ) 1,333,975 Customer list 3 years 184,825 (97,538 ) 87,287 $ 15,338,654 $ (2,832,109 ) $ 12,506,545 December 31, 2023 Estimated Gross Accumulated Amortization Net Patent 10 years $ 30,760 $ (30,760 ) $ - Franchisee contract-based agreements 10 years 12,744,367 (1,380,638 ) 11,363,729 Liberty Loan brand 10 years 340,218 (36,855 ) 303,363 Non-compete agreements 10 years 86,113 (9,334 ) 76,779 Non contractual customer relationships 5 years 1,952,371 (423,020 ) 1,529,351 Customer list 3 years 184,825 (66,742 ) 118,083 $ 15,338,654 $ (1,947,349 ) $ 13,391,305 |
Schedule of Future Estimated Amortization Expense | As of June 30, 2024, future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following table: Amortization 2024 (six months remaining) 884,580 2025 1,764,026 2026 1,707,552 2027 1,675,012 2028 1,317,072 Total $ 7,348,242 |
Promissory Notes-Related Part_2
Promissory Notes-Related Parties (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Promissory Notes-Related Parties [Abstract] | |
Schedule of Amounts Payable Under the Promissory Notes | Amounts payable under the promissory notes are as follows: Debt Interest 2024 $ - $ 174,096 2025 $ 10,750,000 $ - |
Loan Payable Under Credit Agr_2
Loan Payable Under Credit Agreement (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Loan Payable Under Credit Agreement [Abstract] | |
Schedule of Covenant Requirements and FlexShopper's Actual Results | A summary of the covenant requirements, and FlexShopper’s actual results at June 30, 2024, follows: June 30, 2024 Required Actual Equity Book Value not less than $ 16,452,246 $ 27,481,239 Liquidity greater than 3,500,000 10,346,383 Cash greater than 2,500,000 4,892,912 Consolidated Total Debt to Equity Book Value ratio not to exceed 5.25 4.72 |
Capital Structure (Tables)
Capital Structure (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Capital Structure [Abstract] | |
Schedule of Outstanding Stock Warrants | The following table summarizes information about outstanding stock warrants as of June 30, 2024 and December 31, 2023, all of which are exercisable: Exercise Common Stock Warrants Weighted Average Remaining Contractual Life Price Outstanding June 30, 2024 Dec 31, 2023 $ 1.25 1,055,184 2 years 2 years $ 1.25 160,000 2 years 2 years $ 1.34 40,000 2 years 2 years $ 1.40 40,000 2 years 2 years $ 1.54 40,000 2 years 2 years $ 1.62 40,000 2 years 2 years $ 1.68 40,000 2 years 2 years $ 1.69 40,000 2 years 2 years $ 1.74 40,000 2 years 2 years $ 1.76 40,000 2 years 2 years $ 1.91 40,000 2 years 2 years $ 1.95 40,000 2 years 2 years $ 2.00 40,000 2 years 2 years $ 2.01 40,000 2 years 2 years $ 2.08 40,000 2 years 2 years $ 2.45 40,000 2 years 2 years $ 2.53 40,000 2 years 2 years $ 2.57 40,000 2 years 2 years $ 2.70 40,000 1 years 2 years $ 2.78 40,000 2 years 2 years $ 2.79 40,000 1 years 2 years $ 2.89 40,000 3 years 4 years $ 2.93 40,000 2 years 2 years $ 2.97 40,000 1 years 2 years $ 3.09 40,000 3 years 3 years $ 3.17 40,000 3 years 4 years $ 3.19 40,000 1 years 2 years $ 3.27 40,000 1 years 2 years 2,255,184 |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity Compensation Plans [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense included the following components: Three Months ended Six Months ended 2024 2023 2024 2023 Stock options $ 80,463 $ 384,396 $ 160,907 $ 805,144 Performance share units 74,410 59,404 211,091 59,404 Total stock-based compensation $ 154,873 $ 443,800 $ 371,998 $ 864,548 |
Schedule of Weighted Average of Stock Options Granted | The weighted average assumptions used for the stock options granted during the six months ended June 30, 2023 were as follows: Six Months Exercise price $ 0.79 Expected life 6 years Expected volatility 96 % Dividend yield 0 % Risk-free interest rate 3.54 % |
Schedule of Activity in Stock Option | Activity in stock options for the six month periods ended June 30, 2024 and June 30, 2023 was as follows: Number of Weighted Weighted Aggregate Outstanding at January 1, 2024 4,452,447 $ 1.57 $ 2,152,602 Granted - Exercised/Released - Expired (55,000 ) 8.00 - Outstanding at June 30, 2024 4,397,447 $ 1.49 6.93 $ 1,118,281 Vested and exercisable at June 30, 2024 3,661,778 $ 1.56 6.71 $ 855,491 Outstanding at January 1, 2023 3,919,228 $ 1.97 $ 52,223 Granted 1,517,844 0.79 75 Exercised (1,500 ) 0.79 345 Outstanding at June 30, 2023 5,435,572 $ 1.64 7.27 $ 1,102,624 Vested and exercisable at June 30, 2023 4,049,004 $ 1.84 6.66 $ 580,962 |
Schedule of Activity in Performance Share Units | Activity in performance share units for the six months ended June 30, 2024 and June 30, 2023 was as follows: Number of Weighted Non- vested at January 1, 2024 1,250,000 $ 0.78 Exercised/Released (312,501 ) 0.78 Non- vested at June 30, 2024 937,499 $ 0.78 Non- vested at January 1, 2023 790,327 $ 1.53 Granted 1,250,000 0.78 Forfeited/ unearned (790,327 ) 1.53 Non- vested at June 30, 2023 1,250,000 $ 0.78 |
Business (Details)
Business (Details) | Jun. 30, 2024 |
FlexShopper, LLC [Member] | |
Business [Line Items] | |
Investment percentage | 100% |
FlexLending, LLC [Member] | |
Business [Line Items] | |
Investment percentage | 100% |
Flex Revolution, LLC [Member] | |
Business [Line Items] | |
Investment percentage | 100% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 | |
Summary of Significant Accounting Policies [Line Items] | |||||
Operating segment | 1 | ||||
Lease receivables balances charged off | $ 2,230,263 | $ 13,757,036 | $ 4,236,950 | $ 32,728,807 | |
Net of changes in fair value | 687,479 | 1,821,700 | (4,898,876) | 837,048 | |
Interest expense | 5,226,155 | 4,568,557 | 10,541,249 | 9,099,884 | |
Intangible asset amortization expense | 442,426 | 443,059 | 884,760 | 886,118 | |
Depreciation and amortization expense | $ 1,561,352 | 1,207,069 | $ 3,097,061 | 2,370,418 | |
Largest benefit percentage | 50% | ||||
Patents [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Intangible assets, terms | 10 years | 10 years | 10 years | ||
Deferred Debt Issuance Costs [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Capitalized software amortization expense | $ 1,203,688 | ||||
Promissory Notes [Member] | Deferred Debt Issuance Costs [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Interest expense | $ 229,395 | ||||
Minimum [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Intangible assets, terms | 2 years | 2 years | |||
Maximum [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Intangible assets, terms | 7 years | 7 years | |||
Credit Agreement [Member] | Deferred Debt Issuance Costs [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Interest expense | $ 190,388 | 70,368 | $ 261,168 | 140,735 | |
Basepoint Credit Agreement [Member] | Deferred Debt Issuance Costs [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Interest expense | 9,617 | 3,206 | 19,234 | 3,206 | |
Promissory Notes [Member] | Deferred Debt Issuance Costs [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Interest expense | 114,698 | 38,233 | 38,233 | ||
Software [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Capitalized software costs | 1,221,579 | 1,227,024 | 2,505,268 | 2,522,838 | |
Capitalized software amortization expense | 961,061 | 2,351,166 | 1,870,405 | ||
Data [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Capitalized software costs | 479,871 | 174,346 | 944,313 | 343,428 | |
Capitalized software amortization expense | $ 378,951 | $ 234,417 | $ 716,392 | $ 454,167 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Lease Receivables Balances - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Schedule of Accounts Receivable [Abstract] | ||
Lease receivables | $ 90,159,481 | $ 64,749,918 |
Allowance for doubtful accounts | (33,008,354) | (19,954,828) |
Lease receivables, net | $ 57,151,127 | $ 44,795,090 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of Lease Receivables Balances Charged Off Against the Allowance - Lease Receivables [Member] - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Summary of Significant Accounting Policies (Details) - Schedule of Lease Receivables Balances Charged Off Against the Allowance [Line Items] | |||
Beginning balance | $ 19,954,828 | $ 19,954,828 | $ 13,078,800 |
Provision | 17,290,476 | 42,505,647 | |
Accounts written off | (4,236,950) | (35,629,619) | |
Ending balance | $ 33,008,354 | $ 33,008,354 | $ 19,954,828 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of Net Lease Merchandise Balances - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Schedule of Net Leased Merchandise [Abstract] | ||
Lease merchandise at cost | $ 48,811,580 | $ 49,687,498 |
Accumulated depreciation and impairment reserve | (22,955,038) | (20,556,058) |
Lease merchandise, net | $ 25,856,542 | $ 29,131,440 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of Lessor Revenues and Fees - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Schedule of Lease Revenues and Fees [Abstract] | ||||
Lease billings and accruals | $ 34,686,893 | $ 32,501,656 | $ 69,971,769 | $ 66,756,740 |
Provision for doubtful accounts | (7,806,427) | (10,847,413) | (17,290,476) | (22,085,828) |
Gain on sale of lease receivables | 28,525 | 1,252,600 | 61,434 | 2,950,089 |
Lease placement collections | 165,057 | 165,057 | ||
Lease revenues and fees | $ 27,074,048 | $ 22,906,843 | $ 52,907,784 | $ 47,621,001 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of Number of Common Shares Issuable Upon Conversion or Exercise - shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 13,661,056 | 15,011,682 |
Series 1 Convertible Preferred Stock [Member] | ||
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 225,231 | 225,231 |
Series 2 Convertible Preferred Stock [Member] | ||
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 5,845,695 | 5,845,695 |
Common Stock Options [Member] | ||
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 4,397,447 | 5,435,572 |
Common Stock Warrants [Member] | ||
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 2,255,184 | 2,255,184 |
Performance Share Units [Member] | ||
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 937,499 | 1,250,000 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details) - Schedule of Computation of Basic and Diluted Earnings Per Common Share - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Numerator | ||||||
Net loss | $ (1,603,059) | $ (214,179) | $ (5,297,655) | $ (230,215) | $ (1,817,238) | $ (5,527,870) |
Series 2 Convertible Preferred Stock dividends | (1,091,742) | (992,493) | (2,161,198) | (1,964,726) | ||
Net loss attributable to common and Series 1 Convertible Preferred Stock | (2,694,801) | (6,290,148) | (3,978,436) | (7,492,596) | ||
Net income attributable to Series 1 Convertible Preferred Stock | ||||||
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock | ||||||
Net loss attributable to common shares- Numerator for basic EPS | (2,694,801) | (6,290,148) | (3,978,436) | (7,492,596) | ||
Effect of dilutive securities: | ||||||
Series 2 Convertible Preferred Stock dividends | ||||||
Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS | $ (2,694,801) | $ (6,290,148) | $ (3,978,436) | $ (7,492,596) | ||
Denominator | ||||||
Weighted average of common shares outstanding- Denominator for basic EPS (in Shares) | 21,469,720 | 21,752,304 | 21,527,869 | 21,751,807 | ||
Effect of dilutive securities: | ||||||
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS (in Shares) | 21,469,720 | 21,752,304 | 21,527,869 | 21,751,807 | ||
Basic EPS (in Dollars per share) | $ (0.13) | $ (0.29) | $ (0.18) | $ (0.34) | ||
Diluted EPS (in Dollars per share) | $ (0.13) | $ (0.29) | $ (0.18) | $ (0.34) | ||
Series 2 Convertible Preferred Stock [Member] | ||||||
Effect of dilutive securities: | ||||||
Series 2 Convertible Preferred Stock dividends | ||||||
Effect of dilutive securities: | ||||||
Effect of dilutive securities | ||||||
Series 1 Convertible Preferred Stock [Member] | ||||||
Effect of dilutive securities: | ||||||
Effect of dilutive securities | ||||||
Common stock options and performance share units [Member] | ||||||
Effect of dilutive securities: | ||||||
Effect of dilutive securities | ||||||
Common stock warrants [Member] | ||||||
Effect of dilutive securities: | ||||||
Effect of dilutive securities |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details) - Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis - Carrying Amount [Member] - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | |
Schedule of Fair Value Assets measured on Recurring Basis [Line Items] | |||
Loan receivables at fair value | [1] | $ 48,618,482 | $ 48,076,705 |
Level 1 [Member] | |||
Schedule of Fair Value Assets measured on Recurring Basis [Line Items] | |||
Loan receivables at fair value | [1] | ||
Level 2 [Member] | |||
Schedule of Fair Value Assets measured on Recurring Basis [Line Items] | |||
Loan receivables at fair value | [1] | ||
Level 3 [Member] | |||
Schedule of Fair Value Assets measured on Recurring Basis [Line Items] | |||
Loan receivables at fair value | [1] | $ 40,085,656 | $ 35,794,290 |
[1]For cash, lease receivable, and accounts payable the carrying amount is a reasonable estimate of fair value due to their short-term nature. The carrying value of loans payable under the Credit Agreement, the carrying value of loans payable under Basepoint Credit Agreement, and the carrying value of promissory notes to related parties approximates fair value based upon their interest rates, which approximate current market interest rates. |
Summary of Significant Accou_11
Summary of Significant Accounting Policies (Details) - Schedule of Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation - Level 3 [Member] - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | ||
Schedule of Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance | $ 35,794,290 | $ 32,932,504 | |
Purchases of loan participation | 1,058,998 | 389,949 | |
Obligation of loan participation | (12,931) | ||
Loan originations | 26,200,446 | 57,554,746 | |
Interest and fees | [1] | 5,746,776 | 14,801,188 |
Collections | (32,554,732) | (80,089,020) | |
Net charge off | [1] | (2,411,225) | (11,041,155) |
Net change in fair value | [1] | 6,251,103 | 21,259,009 |
Ending balance | $ 40,085,656 | $ 35,794,290 | |
[1]Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statements of operations |
Summary of Significant Accou_12
Summary of Significant Accounting Policies (Details) - Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Dec. 31, 2023 | |||
Minimum [Member] | ||||
Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement [Line Items] | ||||
Estimated losses | [1] | 0% | 0% | |
Servicing costs | ||||
Discount rate | ||||
Maximum [Member] | ||||
Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement [Line Items] | ||||
Estimated losses | [1] | 92.40% | 92.50% | |
Servicing costs | ||||
Discount rate | ||||
Weighted Average [Member] | ||||
Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement [Line Items] | ||||
Estimated losses | [1] | 21.40% | [2] | 28.90% |
Servicing costs | 4.40% | [2] | 4.70% | |
Discount rate | 20.50% | [2] | 20.10% | |
[1]Figure disclosed as a percentage of outstanding principal balance.[2]Unobservable inputs were weighted by outstanding principal balance, which are grouped by origination channel. |
Summary of Significant Accou_13
Summary of Significant Accounting Policies (Details) - Schedule of Concerning Loan Receivables at Fair Value - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Schedule of Concerning Loan Receivables at Fair Value [Abstract] | ||
Aggregate fair value of loan receivables that are 90 days or more past due | $ 33,104,613 | $ 27,828,083 |
Unpaid principal balance of loan receivables that are 90 days or more past due | 42,613,754 | 41,208,009 |
Aggregate fair value of loan receivables in non-accrual status | $ 33,119,327 | $ 27,764,926 |
Leases (Details)
Leases (Details) | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2021 USD ($) | Jan. 31, 2019 USD ($) ft² | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | |
Leases [Abstract] | ||||||
Area of land (in Square Feet) | ft² | 21,622 | |||||
Monthly rent | $ 8,800 | $ 31,500 | ||||
Rent expanses | $ 1,800 | |||||
Lease cost | $ 98,993 | $ 97,367 | $ 198,097 | $ 194,623 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of Supplemental Balance Sheet Information Related to Leases - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Schedule of Supplemental Balance Sheet Information Related to Leases [Abstract] | ||
Operating Lease Asset | $ 1,142,104 | $ 1,233,538 |
Finance Lease Asset | 3,472 | |
Total Lease Assets | 1,142,104 | 1,237,010 |
Operating Lease Liability – current portion | 263,104 | 240,444 |
Finance Lease Liability – current portion | 7 | 4,608 |
Operating Lease Liability – net of current portion | 1,184,683 | 1,321,578 |
Total Lease Liabilities | $ 1,447,794 | $ 1,566,630 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term | Jun. 30, 2024 |
Schedule of Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term [Abstract] | |
Operating Leases, Weighted Average Discount Rate | 13.03% |
Operating Leases, Weighted Average Remaining Lease Term (in years) | 4 years |
Finance Leases, Weighted Average Discount Rate | 13.39% |
Finance Leases, Weighted Average Remaining Lease Term (in years) |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of Supplemental Cash Flow Information Related to Operating Leases - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Schedule of Supplemental Cash Flow Information Related to Operating Leases [Abstract] | ||
Cash payments for operating leases | $ 212,938 | $ 206,736 |
Cash payments for finance leases | $ 4,782 | $ 4,782 |
Leases (Details) - Schedule o_4
Leases (Details) - Schedule of Undiscounted Operating Lease Liabilities | Jun. 30, 2024 USD ($) |
Schedule of Undiscounted Operating Lease Liabilities [Abstract] | |
2024 | $ 217,197 |
2025 | 443,038 |
2026 | 456,330 |
2027 | 470,019 |
2028 and thereafter | 303,574 |
Total undiscounted cash flows | 1,890,158 |
Less: interest | (442,371) |
Present value of lease liabilities | $ 1,447,787 |
Leases (Details) - Schedule o_5
Leases (Details) - Schedule of Undiscounted Finance Lease Liabilities | Jun. 30, 2024 USD ($) |
Schedule of Undiscounted Finance Lease Liabilities [Abstract] | |
2024 | $ 7 |
Total undiscounted cash flows | 7 |
Less: interest | |
Present value of lease liabilities | $ 7 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Property and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 1,561,352 | $ 1,207,069 | $ 3,097,061 | $ 2,370,418 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of Property and Equipment - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Schedule of Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 34,152,611 | $ 30,945,304 |
Less: accumulated depreciation and amortization | (24,733,506) | (21,636,445) |
Property and equipment, net | 9,419,105 | 9,308,859 |
Furniture, fixtures and vehicle [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 395,867 | 395,868 |
Website and internal use software [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Estimated useful Lives | 3 years | |
Property and equipment, gross | $ 28,291,589 | 25,786,321 |
Computers and software [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,465,155 | $ 4,763,115 |
Minimum [Member] | Furniture, fixtures and vehicle [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Estimated useful Lives | 2 years | |
Minimum [Member] | Computers and software [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Estimated useful Lives | 3 years | |
Maximum [Member] | Furniture, fixtures and vehicle [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Estimated useful Lives | 5 years | |
Maximum [Member] | Computers and software [Member] | ||
Schedule of Property and Equipment [Line Items] | ||
Estimated useful Lives | 7 years |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Intangible Assets [Abstract] | ||||
Intangible assets | $ 442,426 | $ 443,059 | $ 884,760 | $ 886,118 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of Intangible Assets - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Schedule of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 15,338,654 | $ 15,338,654 |
Accumulated Amortization | (2,832,109) | (1,947,349) |
Net Carrying Amount | $ 12,506,545 | $ 13,391,305 |
Patent [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | 10 years |
Gross Carrying Amount | $ 30,760 | $ 30,760 |
Accumulated Amortization | (30,760) | (30,760) |
Net Carrying Amount | ||
Franchisee contract-based agreements [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | 10 years |
Gross Carrying Amount | $ 12,744,367 | $ 12,744,367 |
Accumulated Amortization | (2,017,840) | (1,380,638) |
Net Carrying Amount | $ 10,726,527 | $ 11,363,729 |
Liberty Loan brand [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | 10 years |
Gross Carrying Amount | $ 340,218 | $ 340,218 |
Accumulated Amortization | (53,823) | (36,855) |
Net Carrying Amount | $ 286,395 | $ 303,363 |
Non-compete agreements [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | 10 years |
Gross Carrying Amount | $ 86,113 | $ 86,113 |
Accumulated Amortization | (13,752) | (9,334) |
Net Carrying Amount | $ 72,361 | $ 76,779 |
Non contractual customer relationships [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Estimated Useful Life | 5 years | 5 years |
Gross Carrying Amount | $ 1,952,371 | $ 1,952,371 |
Accumulated Amortization | (618,396) | (423,020) |
Net Carrying Amount | $ 1,333,975 | $ 1,529,351 |
Customer list [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years | 3 years |
Gross Carrying Amount | $ 184,825 | $ 184,825 |
Accumulated Amortization | (97,538) | (66,742) |
Net Carrying Amount | $ 87,287 | $ 118,083 |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of Future Estimated Amortization Expense | Jun. 30, 2024 USD ($) |
Schedule of Future Estimated Amortization Expense [Abstract] | |
2024 (six months remaining) | $ 884,580 |
2025 | 1,764,026 |
2026 | 1,707,552 |
2027 | 1,675,012 |
2028 | 1,317,072 |
Total | $ 7,348,242 |
Promissory Notes-Related Part_3
Promissory Notes-Related Parties (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jan. 25, 2019 | |
Promissory Notes-Related Parties [Line Items] | |||||
Interest paid | $ 53,346 | $ 105,988 | |||
Interest expense | 53,346 | 105,022 | |||
Deferred debt cost | $ 917,581 | ||||
NRNS [Member] | |||||
Promissory Notes-Related Parties [Line Items] | |||||
Interest paid | $ 547,717 | 573,466 | 1,130,537 | 1,139,375 | |
Interest expense | $ 523,415 | $ 573,466 | $ 1,106,010 | $ 1,128,987 | |
Bear interest rate | 19.44% | 19.44% | |||
Promissory Note Borrower [Member] | NRNS [Member] | |||||
Promissory Notes-Related Parties [Line Items] | |||||
Principal amount | $ 3,750,000 | $ 3,750,000 | |||
NRNS [Member] | |||||
Promissory Notes-Related Parties [Line Items] | |||||
Maturity date | Jul. 01, 2024 | ||||
Minimum [Member] | |||||
Promissory Notes-Related Parties [Line Items] | |||||
Credit commitment | $ 3,750,000 | ||||
Maximum [Member] | |||||
Promissory Notes-Related Parties [Line Items] | |||||
Credit commitment | $ 11,000,000 | ||||
Chief Financial Officer [Member] | H.Russell Heiser [Member] | |||||
Promissory Notes-Related Parties [Line Items] | |||||
Principal amount | $ 1,000,000 |
Promissory Notes-Related Part_4
Promissory Notes-Related Parties (Details) - Schedule of Amounts Payable Under the Promissory Notes - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
2024 [Member] | ||
Schedule of Amounts Payable Under the Promissory Notes [Line Items] | ||
Promissory note | $ 174,096 | |
2025 [Member] | ||
Schedule of Amounts Payable Under the Promissory Notes [Line Items] | ||
Promissory note | $ 10,750,000 |
Loan Payable Under Credit Agr_3
Loan Payable Under Credit Agreement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Mar. 27, 2024 | Sep. 30, 2022 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Loan Payable Under Credit Agreement [Line Items] | |||||||
Commitment termination date | Apr. 01, 2024 | ||||||
Borrowed under credit agreement | $ 150,000,000 | ||||||
Lender fee percentage | 1% | ||||||
Borrowed bear interest | 14.44% | 14.44% | |||||
Repaid credit agreement | $ 220,000 | $ 2,795,000 | |||||
Waterfall Asset Management, LLC [Member] | |||||||
Loan Payable Under Credit Agreement [Line Items] | |||||||
Commitment loan percentage | 100% | ||||||
SOFR Plus [Member] | |||||||
Loan Payable Under Credit Agreement [Line Items] | |||||||
Interest rate | 9% | 11% | |||||
Credit Agreement [Member] | |||||||
Loan Payable Under Credit Agreement [Line Items] | |||||||
Borrowed under credit agreement | $ 11,750,000 | 0 | $ 22,361,690 | 2,750,000 | |||
Repaid credit agreement | 0 | 0 | |||||
Interest expense | 4,137,318 | $ 3,332,686 | 8,422,665 | $ 6,611,523 | |||
Outstanding under credit agreement | 118,816,690 | 118,816,690 | $ 96,455,000 | ||||
Unamortized issuance costs | $ 1,332,712 | $ 1,332,712 | $ 70,780 |
Loan Payable Under Credit Agr_4
Loan Payable Under Credit Agreement (Details) - Schedule of Covenant Requirements and FlexShopper's Actual Results | Jun. 30, 2024 USD ($) $ / shares |
Required Covenant [Member] | |
Schedule of Covenant Requirements and FlexShopper [Line Items] | |
Equity Book Value not less than | $ 16,452,246 |
Liquidity greater than | 3,500,000 |
Cash greater than | $ 2,500,000 |
Consolidated Total Debt to Equity Book Value ratio not to exceed (in Dollars per share) | $ / shares | $ 5.25 |
Actual Position [Member] | |
Schedule of Covenant Requirements and FlexShopper [Line Items] | |
Equity Book Value not less than | $ 27,481,239 |
Liquidity greater than | 10,346,383 |
Cash greater than | $ 4,892,912 |
Consolidated Total Debt to Equity Book Value ratio not to exceed (in Dollars per share) | $ / shares | $ 4.72 |
Capital Structure (Details)
Capital Structure (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | Sep. 30, 2018 | |
Capital Structure [Line Items] | ||||
Common stock price per share (in Dollars per share) | $ 23 | |||
Common stock, share authorized | 40,000,000 | 40,000,000 | 40,000,000 | |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Deferred debt cost (in Dollars) | $ 917,581 | $ 917,581 | ||
Warrant expenses (in Dollars) | $ 917,581 | $ 917,581 | ||
Warrant [Member] | ||||
Capital Structure [Line Items] | ||||
Warrants exercisable | 1,055,184 | |||
Exercise price (in Dollars per share) | $ 1.25 | |||
Issuance of warrants | 1,200,000 | |||
Number of warrants | 840,000 | 840,000 | ||
Series 1 Convertible Preferred Stock [Member] | ||||
Capital Structure [Line Items] | ||||
Preferred stock, shares authorized | 250,000 | 250,000 | 250,000 | |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares designated | 250,000 | 250,000 | ||
Convertible preferred stock | 1.3223 | 1.3223 | ||
Convertible preferred stock, shares outstanding | 170,332 | 170,332 | 170,332 | |
Convertible preferred stock, shares issued upon conversion | 225,231 | 225,231 | ||
Series 2 Convertible Preferred Stock [Member] | ||||
Capital Structure [Line Items] | ||||
Preferred stock, shares authorized | 25,000 | 25,000 | 25,000 | |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares designated | 25,000 | 25,000 | ||
Convertible preferred stock, shares outstanding | 21,952 | 21,952 | 21,952 | |
Convertible preferred stock, shares issued upon conversion | 20,000 | 20,000 | ||
Gross proceeds (in Dollars) | $ 20,000,000 | |||
Additional sale of shares | 1,952 | |||
Accrue dividends stated value (in Dollars) | $ 1,000 | |||
Annual rate | 10% | |||
Cumulative accrued dividends (in Dollars) | $ 25,349,212 | $ 25,349,212 | ||
Preferred stock conversion into common stock, shares | 266 | |||
Series 2 Convertible Preferred Stock [Member] | Investor [Member] | ||||
Capital Structure [Line Items] | ||||
Gross proceeds (in Dollars) | $ 1,950,000 | |||
Preferred Stock [Member] | ||||
Capital Structure [Line Items] | ||||
Preferred stock, shares authorized | 500,000 | 500,000 | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Capital Structure (Details) - S
Capital Structure (Details) - Schedule of Outstanding Stock Warrants - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Schedule of Outstanding Stock Warrants [Line Items] | ||
Common Stock Warrants Outstanding (in Shares) | 2,255,184 | |
Exercise Price 1.25 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.25 | |
Common Stock Warrants Outstanding (in Shares) | 1,055,184 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.25 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.25 | |
Common Stock Warrants Outstanding (in Shares) | 160,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.34 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.34 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.40 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.4 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.54 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.54 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.62 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.62 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.68 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.68 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.69 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.69 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.74 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.74 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.76 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.76 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.91 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.91 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 1.95 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 1.95 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 2.00 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 2.01 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.01 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 2.08 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.08 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 2.45 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.45 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 2.53 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.53 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 2.57 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.57 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 2.70 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.7 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 1 year | 2 years |
Exercise Price 2.78 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.78 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 2.79 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.79 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 1 year | 2 years |
Exercise Price 2.89 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.89 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | 4 years |
Exercise Price 2.93 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.93 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 2 years | 2 years |
Exercise Price 2.97 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 2.97 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 1 year | 2 years |
Exercise Price 3.09 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 3.09 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | 3 years |
Exercise Price 3.17 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 3.17 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 3 years | 4 years |
Exercise Price 3.19 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 3.19 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 1 year | 2 years |
Exercise Price 3.27 [Member] | ||
Schedule of Outstanding Stock Warrants [Line Items] | ||
Exercise Price (in Dollars per share) | $ 3.27 | |
Common Stock Warrants Outstanding (in Shares) | 40,000 | |
Weighted Average Remaining Contractual Life | 1 year | 2 years |
Equity Compensation Plans (Deta
Equity Compensation Plans (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Equity Compensation Plans [Line Items] | ||||
Compensation expense | $ 154,873 | $ 443,800 | $ 371,998 | $ 864,548 |
Weighted average grant date fair value of options granted | $ 0.6 | |||
Potentially be issued shares | 13,661,056 | 15,011,682 | ||
Equity Option [Member] | ||||
Equity Compensation Plans [Line Items] | ||||
Shares remained available for issuance | 2,150,000 | 2,150,000 | ||
Compensation expense | $ 80,463 | 384,396 | $ 160,907 | $ 805,144 |
Performance Shares [Member] | ||||
Equity Compensation Plans [Line Items] | ||||
Compensation expense | 74,410 | $ 59,404 | 211,091 | $ 59,404 |
Unrecognized compensation cost related to non-vested options | $ 809,543 | $ 809,543 | ||
Weighted average period | 1 year 10 months 2 days | |||
Weighted average grant date fair value of options granted | $ 0.78 | |||
Earned shares | 1,250,000 | |||
Vested shares | 312,501 | |||
Minimum [Member] | Performance Shares [Member] | ||||
Equity Compensation Plans [Line Items] | ||||
Potentially be issued shares | 0 | |||
Maximum [Member] | Performance Shares [Member] | ||||
Equity Compensation Plans [Line Items] | ||||
Potentially be issued shares | 1,250,000 |
Equity Compensation Plans (De_2
Equity Compensation Plans (Details) - Schedule of Stock-Based Compensation Expense - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Schedule of Stock-Based Compensation Expense [Line Items] | ||||
Total stock-based compensation | $ 154,873 | $ 443,800 | $ 371,998 | $ 864,548 |
Stock options [Member] | ||||
Schedule of Stock-Based Compensation Expense [Line Items] | ||||
Total stock-based compensation | 80,463 | 384,396 | 160,907 | 805,144 |
Performance share units [Member] | ||||
Schedule of Stock-Based Compensation Expense [Line Items] | ||||
Total stock-based compensation | $ 74,410 | $ 59,404 | $ 211,091 | $ 59,404 |
Equity Compensation Plans (De_3
Equity Compensation Plans (Details) - Schedule of Weighted Average of Stock Options Granted | 6 Months Ended |
Jun. 30, 2023 $ / shares | |
Schedule of Weighted Average of Stock Options Granted [Abstract] | |
Exercise price (in Dollars per share) | $ 0.79 |
Expected life | 6 years |
Expected volatility | 96% |
Dividend yield | 0% |
Risk-free interest rate | 3.54% |
Equity Compensation Plans (De_4
Equity Compensation Plans (Details) - Schedule of Activity in Stock Option - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Schedule of Activity in Stock Option [Line Items] | ||
Outstanding, Number of options, beginning | 4,452,447 | 3,919,228 |
Outstanding, Weighted average exercise price, beginning (in Dollars per share) | $ 1.57 | $ 1.97 |
Outstanding, Aggregate intrinsic value, beginning (in Dollars) | $ 2,152,602 | $ 52,223 |
Granted, Number of options | 1,517,844 | |
Granted, Weighted average exercise price (in Dollars per share) | $ 0.79 | |
Granted, Aggregate intrinsic value (in Dollars) | $ 75 | |
Exercised/Released, Number of options | (1,500) | |
Exercised/Released, Weighted average exercise price (in Dollars per share) | $ 0.79 | |
Exercised/Released, Aggregate intrinsic value (in Dollars) | $ 345 | |
Expired, Number of options | (55,000) | |
Expired, Weighted average exercise price (in Dollars per share) | $ 8 | |
Expired, Aggregate intrinsic value (in Dollars) | ||
Outstanding, Number of options, ending | 4,397,447 | 5,435,572 |
Outstanding, Weighted average exercise price, ending (in Dollars per share) | $ 1.49 | $ 1.64 |
Outstanding at Weighted average contractual term (years), ending | 6 years 11 months 4 days | 7 years 3 months 7 days |
Outstanding, Aggregate intrinsic value, ending (in Dollars) | $ 1,118,281 | $ 1,102,624 |
Vested and exercisable, Number of options | 3,661,778 | 4,049,004 |
Vested and exercisable, Weighted average exercise price (in Dollars per share) | $ 1.56 | $ 1.84 |
Vested and exercisable, Weighted average contractual term (years) | 6 years 8 months 15 days | 6 years 7 months 28 days |
Vested and exercisable, Aggregate intrinsic value (in Dollars) | $ 855,491 | $ 580,962 |
Equity Compensation Plans (De_5
Equity Compensation Plans (Details) - Schedule of Activity in Performance Share Units - Performance share units [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Equity Compensation Plans (Details) - Schedule of Activity in Performance Share Units [Line Items] | ||
Number of performance share units, Non- vested, Beginning | 1,250,000 | 790,327 |
Weighted average grant date fair value, Non- vested, Beginning | $ 0.78 | $ 1.53 |
Number of performance share units, Granted | 1,250,000 | |
Weighted average grant date fair value, Granted | $ 0.78 | |
Number of performance share units, Forfeited/ unearned | (790,327) | |
Weighted average grant date fair value, Forfeited/ unearned | $ 1.53 | |
Number of performance share units, Exercised/Released | (312,501) | |
Weighted average grant date fair value, Exercised/Released | $ 0.78 | |
Number of performance share units, Non- vested, Ending | 937,499 | 1,250,000 |
Weighted average grant date fair value, Non- vested, Ending | $ 0.78 | $ 0.78 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 | Jun. 30, 2024 | |
Income Taxes [Abstract] | ||
Income tax rate, percentage | 41.76% | 21% |
Contingencies and Other Uncer_2
Contingencies and Other Uncertainties (Details) | 6 Months Ended |
Jun. 30, 2024 | |
Contingencies and Other Uncertainties [Abstract] | |
Contracts period | 3 years |
Revolution Transaction (Details
Revolution Transaction (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Revolution Transaction [Line Items] | ||
Consideration transferred | $ 3,421,991 | |
Bargain price | 14,461,274 | |
Fair value of promissory note | $ 3,678,689 | |
Seller Note [Member] | ||
Revolution Transaction [Line Items] | ||
Initial principal amount | $ 5,000,000 | |
Maturity date | Dec. 01, 2027 | |
Interest per annum | 8% |
Basepoint Credit Agreement (Det
Basepoint Credit Agreement (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 USD ($) | Jun. 30, 2024 USD ($) | |
Basepoint Credit Agreement [Line Items] | ||
Agreement due date | Jun. 07, 2026 | |
Borrowing rate | 5% | |
Basepoint Credit Agreement [Member] | ||
Basepoint Credit Agreement [Line Items] | ||
Origination consumer loan | $ 20,000,000 | |
Annual interest rate | 13.42% | 13.42% |
Borrowing rate | 10% | |
Current borrowing value | $ 2,000,000 | $ 2,000,000 |
Interest expense incurred | 251,614 | 503,501 |
Outstanding balance credit agreement | 7,412,605 | 7,412,605 |
Unamortized issuance costs | $ 73,730 | $ 73,730 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Employee Benefit Plan [Abstract] | ||||
Nondiscretionary, percentage | 4% | |||
Total contribution | $ 48,109 | $ 36,601 | $ 97,816 | $ 86,762 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | May 17, 2023 | |
Share Repurchase Program [Line Items] | ||
Share repurchase | $ 2,000,000 | |
Common Stock [Member] | ||
Share Repurchase Program [Line Items] | ||
Share repurchase program (in Shares) | 182,229 | |
Net cost | $ 200,806 |