0001213900-22-025970 | 10-Q | XBRL Viewer

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Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Mar. 31, 2022	May 12, 2022
Document Information Line Items
Entity Registrant Name	FlexShopper, Inc.
Trading Symbol	FPAY
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		21,605,234
Amendment Flag	false
Entity Central Index Key	0001397047
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Mar. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-37945
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-5456087
Entity Address, Address Line One	901 Yamato Road
Entity Address, Address Line Two	Suite 260
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33431
City Area Code	(855)
Local Phone Number	353-9289
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2022	Dec. 31, 2021
CURRENT ASSETS:
Cash	$ 4,319,701	$ 5,094,642
Accounts receivable, net	29,537,940	26,338,883
Loans receivable	7,137,503	3,560,108
Prepaid expenses	932,019	957,527
Lease merchandise, net	36,597,829	40,942,112
Total current assets	78,524,992	76,893,272
Property and equipment, net	8,423,894	7,841,206
Other assets, net	76,809	77,578
Total assets	87,025,695	84,812,056
CURRENT LIABILITIES:
Accounts payable	4,816,837	7,982,180
Accrued payroll and related taxes	665,024	391,078
Promissory notes to related parties, net of $0 at 2022 and net of $1,274 at 2021 of unamortized issuance costs, including accrued interest	225,127	1,053,088
Accrued expenses	1,579,036	2,987,646
Lease liability - current portion	181,197	172,732
Total current liabilities	7,467,221	12,586,724
Loan payable under credit agreement to beneficial shareholder, net of $450,679 at 2022 and $413,076 at 2021 of unamortized issuance costs and current portion	55,699,321	50,061,924
Promissory notes to related parties, net of current portion	7,750,000	3,750,000
Deferred income tax liability	178,160	495,166
Lease liabilities net of current portion	1,726,023	1,774,623
Total liabilities	72,820,725	68,668,437
STOCKHOLDERS’ EQUITY
Series 1 Convertible Preferred Stock, $0.001 par value - authorized 250,000 shares, issued and outstanding 170,332 shares at $5.00 stated value	851,660	851,660
Series 2 Convertible Preferred Stock, $0.001 par value - authorized 25,000 shares, issued and outstanding 21,952 shares at $1,000 stated value	21,952,000	21,952,000
Common stock, $0.0001 par value- authorized 40,000,000 shares, issued and outstanding 21,605,234 shares at March 31, 2022 and 21,442,278 shares at December 31, 2021	2,161	2,144
Additional paid in capital	39,002,386	38,560,117
Accumulated deficit	(47,603,237)	(45,222,302)
Total stockholders’ equity	14,204,970	16,143,619
Total liabilities and stockholders' equity	$ 87,025,695	$ 84,812,056

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Promissory notes to related parties net unamortized issuance costs (in Dollars)	$ 0	$ 1,274
Loan payable unamortized issuance costs and current portion (in Dollars)	$ 450,679	$ 413,076
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	21,605,234	21,442,278
Common stock, shares outstanding	21,605,234	21,442,278
Series 1 Convertible Preferred Stock
Convertible preferred stock, stated value (in Dollars)	$ 5	$ 5
Convertible preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized	250,000	250,000
Convertible preferred stock, shares issued	170,332	170,332
Convertible preferred stock, shares outstanding	170,332	170,332
Series 2 Convertible Preferred Stock
Convertible preferred stock, stated value (in Dollars)	$ 1,000	$ 1,000
Convertible preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized	25,000	25,000
Convertible preferred stock, shares issued	21,952	21,952
Convertible preferred stock, shares outstanding	21,952	21,952

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Lease revenues and fees, net	$ 27,766,312	$ 32,751,331
Loan revenues and fees, net of changes in fair value	1,188,924	32,339
Total revenues	28,955,236	32,783,670
Costs and expenses:
Cost of lease revenues, consisting of depreciation and impairment of lease merchandise	19,160,611	22,463,556
Loan origination costs and fees	425,513	63,397
Marketing	2,014,115	1,832,740
Salaries and benefits	2,964,442	2,909,319
Operating expenses	5,673,202	4,114,424
Total costs and expenses	30,237,883	31,383,436
Operating (loss)/income	(1,282,647)	1,400,234
Interest expense including amortization of debt issuance costs	1,958,068	1,398,997
Income before income taxes	(3,240,715)	1,237
Income taxes	(859,780)
Net (loss)/income	(2,380,935)	1,237
Dividends on Series 2 Convertible Preferred Shares	609,777	609,772
Net loss attributable to common and Series 1 Convertible Preferred shareholders	$ (2,990,712)	$ (608,535)
Basic and diluted (in Dollars per share)	$ (0.14)	$ (0.03)
Basic and diluted (in Shares)	21,547,069	21,369,904

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($)	Series 1 Convertible Preferred Stock	Series 2 Convertible Preferred Stock	Common Stock	Additional Paid in Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2020	$ 851,660	$ 21,952,000	$ 2,136	$ 36,843,326	$ (48,495,076)	$ 11,154,046
Balance (in Shares) at Dec. 31, 2020	170,332	21,952	21,359,945
Provision for compensation expense related to stock-based compensation				380,263		380,263
Issuance of warrants in connection with consulting agreement				212,923		212,923
Exercise of stock options into common stock			$ 2	12,910		12,912
Exercise of stock options into common stock (in Shares)			16,000
Net income/loss					1,237	1,237
Balance at Mar. 31, 2021	$ 851,660	$ 21,952,000	$ 2,138	37,449,422	(48,493,839)	11,761,381
Balance (in Shares) at Mar. 31, 2021	170,332	21,952	21,375,945
Balance at Dec. 31, 2021	$ 851,660	$ 21,952,000	$ 2,144	38,560,117	(45,222,302)	16,143,619
Balance (in Shares) at Dec. 31, 2021	170,332	21,952	21,442,278
Provision for compensation expense related to stock-based compensation				305,229		305,229
Issuance of warrants in connection with consulting agreement
Exercise of stock options into common stock			$ 17	137,040		137,057
Exercise of stock options into common stock (in Shares)			162,956
Net income/loss					(2,380,935)	(2,380,935)
Balance at Mar. 31, 2022	$ 851,660	$ 21,952,000	$ 2,161	$ 39,002,386	$ (47,603,237)	$ 14,204,970
Balance (in Shares) at Mar. 31, 2022	170,332	21,952	21,605,234

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income	$ (2,380,935)	$ 1,237
Adjustments to reconcile net (loss)/income to net cash used in operating activities:
Depreciation and impairment of lease merchandise	19,160,611	22,463,556
Other depreciation and amortization	937,062	651,396
Amortization of debt issuance costs	50,603	91,703
Compensation expense related to stock-based compensation and warrants	305,229	593,186
Provision for doubtful accounts	11,831,117	8,833,349
Interest in kind added to promissory notes balance	170,765	9,098
Deferred income tax	(317,006)
Net changes in the fair value of loans receivable	523,424	16,993
Changes in operating assets and liabilities:
Accounts receivable	(15,030,174)	(9,727,764)
Loans receivable	(4,100,819)	(118,417)
Prepaid expenses and other	25,658	(53,683)
Lease merchandise	(14,816,328)	(18,961,999)
Security deposits		4,280
Lease Liabilities	(2,511)	(1,033)
Accounts payable	(3,165,343)	(4,781,405)
Accrued payroll and related taxes	273,946	208,230
Accrued expenses	(1,405,958)	208,266
Net cash used in operating activities	(7,940,659)	(563,007)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment, including capitalized software costs and data costs	(1,553,810)	(734,122)
Net cash used in investing activities	(1,553,810)	(734,122)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loan payable under credit agreement	6,800,000	3,500,000
Repayment of loan payable under credit agreement	(1,125,000)	(3,910,000)
Debt issuance related costs	(86,931)	(526,565)
Proceeds from exercise of stock options	137,057	12,912
Proceeds from promissory notes, net of fees	3,000,000
Principal payment under finance lease obligation	(2,796)	(1,833)
Repayment of instalment loan	(2,802)	(2,802)
Net cash provided by/used in financing activities	8,719,528	(928,288)
DECREASE IN CASH	(774,941)	(2,225,417)
CASH, beginning of period	5,094,642	8,541,232
CASH, end of period	4,319,701	6,315,815
Supplemental cash flow information:
Interest paid	$ 1,679,296	$ 1,282,781

Basis of Presentation

3 Months Ended

Mar. 31, 2022

Accounting Policies [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, 2021 filed with the SEC on March 30, 2022.

The condensed consolidated balance sheet as of December 31, 2021 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 amounts have been reclassified to conform to the current year presentation.

Business

3 Months Ended

Mar. 31, 2022

Business Combinations [Abstract]

BUSINESS

2. BUSINESS

FlexShopper, Inc. (the “Company”) is a corporation organized under the laws of the State of Delaware in 2006. The Company owns 100% of FlexShopper, LLC, a North Carolina limited liability company and owns 100% of FlexLending, LLC, a Delaware limited liability company. The Company is a holding corporation with no operations except for those conducted by FlexShopper LLC and its subsidiary FlexLending, LLC.

In January 2015, in connection with the Credit Agreement entered in March 2015 (see Note 7), FlexShopper 1 LLC and FlexShopper 2 LLC were organized as wholly owned Delaware subsidiaries of FlexShopper LLC to conduct operations. FlexShopper Inc, together with its subsidiaries, are hereafter referred to as “FlexShopper.”

FlexShopper, LLC provides through e-commerce sites, certain types of durable goods to consumers on a lease-to-own basis (“LTO”) including consumers of third-party retailers and e-tailers. The Company effects these transactions by first approving consumers through its proprietary, risk analytics-powered underwriting model. After receiving a signed consumer lease, the Company then funds the leased item by purchasing the item from the Company’s merchant partner and leasing it to the consumer. The Company then collects payments from consumers under their consumer lease.

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.

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation - The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries after elimination of intercompany balances and transactions.

Estimates - The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition - Merchandise is leased to customers pursuant to lease purchase agreements which provide for weekly lease terms with non-refundable lease payments. Generally, the customer has the right to acquire title either through a 90-day same as cash option, an early purchase option, or through completion of all required lease payments, generally 52 weeks. On any current lease, customers have the option to cancel the agreement in accordance with lease terms and return the merchandise. Customer agreements are accounted for as operating leases with lease revenues recognized in the month they are due on the accrual basis of accounting. Merchandise sales revenue is recognized when the customer exercises the purchase option and pays the purchase price. Revenue for lease payments received prior to their due date is deferred and is recognized as revenue in the period to which the payments relate. Revenues from leases and sales are reported net of sales taxes.

Accounts Receivable and Allowance for Doubtful Accounts - FlexShopper seeks to collect amounts owed under its leases from each customer on a weekly or biweekly basis by charging their bank accounts or credit cards. Accounts receivable are principally comprised of lease payments currently owed to FlexShopper which are past due, as FlexShopper has been unable to successfully collect in the aforementioned manner and therefore the Company has an in-house and near-shore team to collect on the past due amounts. FlexShopper maintains an allowance for doubtful accounts, under which FlexShopper’s policy is to record an allowance for estimated uncollectible charges, primarily based on historical collection experience that considers both the aging of the lease and the origination channel. Other qualitative factors are considered in estimating the allowance, such as seasonality, underwriting changes and other business trends. We believe our allowance is adequate to absorb all expected losses. The accounts receivable balances consisted of the following as of March 31, 2022 and December 31, 2021:

	March 31, 2022			December 31, 2021

Accounts receivable	$	51,988,768		$	54,042,161
Allowance for doubtful accounts		(22,450,828	)		(27,703,278	)
Accounts receivable, net	$	29,537,940		$	26,338,883

The allowance is a significant percentage of the balance because FlexShopper does not charge off any customer account until it has exhausted all collection efforts with respect to each account, including attempts to repossess items. In addition, while collections are pursued, the same delinquent customers continue to accrue weekly charges until they are charged off. As the lease ages, the greater the allowance attributable to that account to reflect the decreased likelihood of successful collection efforts. Accounts receivable balances charged off against the allowance were $17,083,567 for the three months ended March 31, 2022 and $7,036,164 for the three months ended March 31, 2021.

	Three Months Ended March 31, 2022			Year Ended December 31, 2021
Beginning balance	$	27,703,278		$	22,138,541
Provision		11,831,117			40,342,618
Accounts written off		(17,083,567	)		(34,777,881	)
Ending balance	$	22,450,828		$	27,703,278

Lease Merchandise - Until all payment obligations for ownership are satisfied under the lease agreement, the Company maintains ownership of the lease merchandise. Lease merchandise consists primarily of residential furniture, consumer electronics, computers, appliances and household accessories and is recorded at cost net of accumulated depreciation. The Company depreciates leased merchandise using the straight-line method over the applicable agreement period for a consumer to acquire ownership, generally twelve months with no salvage value. Upon transfer of ownership of merchandise to customers resulting from satisfaction of their lease obligations, the related cost and accumulated depreciation are eliminated from lease merchandise. For lease merchandise returned or anticipated to be returned either voluntarily or through repossession, the Company provides an impairment reserve for the undepreciated balance of the merchandise net of any estimated salvage value with a corresponding charge to cost of lease revenue. The cost, accumulated depreciation and impairment reserve related to such merchandise are written off upon determination that no salvage value is obtainable.

The net leased merchandise balances consisted of the following as of March 31, 2022 and December 31, 2021:

	March 31, 2022			December 31, 2021
Lease merchandise at cost	$	68,614,211		$	72,159,063
Accumulated depreciation		(29,574,842	)		(29,505,431	)
Impairment reserve		(2,441,540	)		(1,711,520	)
Lease merchandise, net	$	36,597,829		$	40,942,112

Cost of lease merchandise sold represents the undepreciated cost of rental merchandise at the time of sale.

Loans receivable – The Company elected the fair value option on its entire loans receivable portfolio purchased from its bank partner. As such, loans receivable is carried at fair value in the condensed consolidated balance sheet with changes in fair value recorded in the condensed consolidated statement of operations. Accrued and unpaid interest and fees are included in loans receivable in the condensed consolidated balance sheets. Management believes the fair value option for its loans portfolio is a better measure of the asset for the Company given the high growth, short duration, quality and funding structure of the loans portfolio. Also, management believes the reporting of these receivables at fair value more closely approximates the true economics of the loans receivables.

Interest and fees are discontinued when loans receivable become contractually 120 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 120 days contractually past due. Recoveries on loans receivables that were previously charge off are recognized when cash is received. Changes in the fair value of loans receivable include the impact of current period charge offs associated with these receivables.

The Company estimates the fair value of the loans receivable 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 loans receivable are presented within “Fair Value Measurement” section in this Note.

A third-party bank partner originates our credit product and initially provides all of the funding for the loans. The third-party retains 5% of the balance of all loans originated and sells a 95% loan participation to the Company. The Company services the loans and remits the corresponding portion to the third party. Loan revenues and fees is representative of the Company’s portion of participation in the loans.

Lease accounting

The Company accounts for leases in accordance with Accounting Standards Codification (ASC) Topic 842 Leases (Topic 842). Under Topic 842, lessees are required to recognize for all leases at the commencement date as lease liability, which is a lessee’s obligation to make lease payments arising from a lease measured on a discounted basis, and a right-to-use asset, which is an asset that represents the lessee’s right to use or control the use of a specified asset for the lease term. Under the same Topic, lessors are also required to classify leases. All customer agreements are considered operating leases, and the Company currently does not have any sales-type or direct financing leases as a lessor. An operating lease results in the recognition of lease income on a straight-line basis, while the underlying leased asset remains on the lessor’s balance sheet and continues to depreciate.

The breakout of lease revenues and fees, net of lessor bad debt expense, that ties the condensed consolidated statements of operations is shown below:

	Three Months ended
	March 31,
	2022			2021
Lease billings and accruals	$	39,597,429		$	41,584,680
Provision for doubtful accounts		(11,831,117	)		(8,833,349	)
Lease revenues and fees	$	27,766,312		$	32,751,331

Deferred Debt Issuance Costs - Debt issuance costs incurred in conjunction with the Credit Agreement entered into on March 6, 2015 and subsequent amendments 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 $49,329 for the three months ended March 31, 2022 and $88,521 for the three months ended March 31, 2021.

Debt issuance costs incurred in conjunction with the subordinated Promissory Notes are offset against the outstanding balance of the loan payable and are amortized using the straight-line method over the remaining term of the related debt, which approximates the effective interest method. Amortization, which is included in interest expense, was $1,274 for three months ended March 31, 2022 and $3,183 for the three months ended March 31, 2021, respectively.

Intangible Assets - Intangible assets consist of a patent on the Company’s LTO payment method at check-out for third party e-commerce sites. Patents are stated at cost less accumulated amortization. Patent costs are amortized by using the straight-line method over the legal life, or if shorter, the useful life of the patent, which has been estimated to be 10 years. Intangible assets amortization expense was $769 for the three months ended March 31, 2022 and March 31, 2021.

Software Costs - Costs related to developing or obtaining internal-use software incurred during the preliminary project and post-implementation stages of an internal use software project are expensed as incurred and certain costs incurred in the project’s application development stage are capitalized as property and equipment. The Company expenses costs related to the planning and operating stages of a website. Costs associated with minor enhancements and maintenance for the website are included in expenses as incurred. Direct costs incurred in the website’s development stage are capitalized as property and equipment. Capitalized software costs amounted to $984,994 for the three months ended March 31, 2022 and $588,992 for the three months ended March 31, 2021. Capitalized software amortization expense was $621,694 for the three months ended March 31, 2022 and $570,567 for the three months ended March 31, 2021.

Data Costs - The Company buys data from different vendors upon receipt of an application. The data costs directly used to make underwriting decisions are expensed as incurred. Certain data costs that are probable to provide future economic benefit to the Company are capitalized as property and equipment and amortized on a straight-line basis over their estimate useful lives. The probability to provide future economic benefit of the data cost assets is estimated based upon future usage of the information in different areas and products of the Company. At the beginning of the third quarter of 2021, the Company made several changes including the implementation of a more disciplined process around data procurement and storage. Those improvements triggered a change in the estimate of the probability to provide future economic benefit of some data cost.

Capitalized data costs amounted to $293,054 for the three months ended March 31, 2022 and $0 for the three months ended March 31, 2021. Capitalized data costs amortization expense was $88,721 for the three months ended March 31, 2022 and $0 for the three months ended March 31, 2021.

Operating Expenses - Operating expenses include corporate overhead expenses such as salaries, stock-based compensation, insurance, occupancy, and other administrative expenses.

Marketing Costs - Marketing costs, primarily consisting of advertising, are charged to expense as incurred. Direct acquisition costs, primarily consisting of commissions earned based on lease originations, are capitalized and amortized over the life of the lease.

Per Share Data - Per share data is computed by use of the two-class method as a result of outstanding Series 1 Convertible Preferred Stock, which participates in dividends with the common stock and accordingly has participation rights in undistributed earnings as if all such earnings had been distributed during the period (see Note 8). Under such method income available to common shareholders is computed by deducting both dividends declared or, if not declared, accumulated on Series 2 Convertible Preferred Stock from income from continuing operations and from net income. Loss attributable to common shareholders is computed by increasing loss from continuing operations and net loss by such dividends. Where the Company has undistributed net income available to common shareholders, basic earnings per common share is computed based on the total of any dividends paid or declared per common share plus undistributed income per common share determined by dividing net income 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 plus the weighted average number of common shares issuable upon conversion of outstanding participating Series 1 Convertible Preferred Stock during the period. Where the Company has a net loss, basic per share data (including income from continuing operations) is computed based solely on the weighted average number of common shares outstanding during the period. As the participating Series 1 Convertible Preferred Stock has no contractual obligation to share in the losses of the Company, common shares issuable upon conversion of such preferred stock are not included in such computations.

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 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.

In computing diluted loss per share for the three months ended March 31, 2022 and the three months ended March 31, 2021, no effect has been given to the issuance of common stock upon conversion or exercise of the Series 2 Convertible Preferred stock as their effect is anti-dilutive.

	Three Months ended
	March 31,
	2022		2021
Series 1 Convertible Preferred Stock		225,231		225,231
Series 2 Convertible Preferred Stock		5,845,695		5,845,695
Series 2 Convertible Preferred Stock issuable upon exercise of warrants		116,903		116,903
Common Stock Options		3,837,559		3,118,730
Common Stock Warrants		2,255,184		2,232,488
Performance Share Units		790,327		-
		13,070,899		11,539,047

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2022 and 2021:

	Three Months ended
	March 31,
	2022			2021
Numerator
Net (loss)/income	$	(2,380,935	)	$	1,237
Convertible Series 2 Preferred Share dividends		(609,777	)		(609,772	)
Net loss attributable to common and Series 1 Convertible Preferred Shareholders - Numerator for basic and diluted EPS	$	(2,990,712	)	$	(608,535	)
Denominator
Denominator for basic and diluted EPS- weighted average shares		21,547,069			21,369,904
Basic EPS	$	(0.14	)		(0.03	)
Diluted EPS	$	(0.14	)		(0.03	)

Stock-Based Compensation - The fair value of transactions in which the Company exchanges its equity instruments for employee and non-employee services (share-based payment transactions) is recognized as a compensation expense in the financial statements as services are performed.

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 9).

Fair Value of Financial Instruments - The carrying value of certain financial instruments such as cash, accounts receivable, and accounts payable approximate their fair value due to their short-term nature. The carrying value of loans payable under the Credit Agreement increased by unamortized issuance costs 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 utilizes the fair value option on its entire loans receivable portfolio purchased from its bank partner.

Fair Value Measurements- The Company uses a hierarchical framework that prioritizes and ranks the market observability of inputs used in its fair value measurements. Market price observability is affected by a number of factors, including the type of asset or liability and the characteristics specific to the asset or liability being measured. Assets and liabilities with readily available, active, quoted market prices or for which fair value can be measured from actively quoted prices generally are deemed to have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The Company classifies the inputs used to measure fair value into one of three levels as follows:

●

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 March 31, 2022 and December 31, 2021 is as follows:

	Fair Value Measurement Using
Financial instruments – As of March 31, 2022 (1)	Level 1		Level 2		Level 3		Carrying Amount
Loans receivable	$	-	$	-	$	7,137,503	$	7,137,503

	Fair Value Measurement Using
Financial instruments – As of December 31, 2021 (1)	Level 1		Level 2		Level 3		Carrying Amount
Loans receivable	$	-	$	-	$	3,560,108	$	3,560,108

(1) For cash, accounts 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 increased by unamortized issuance costs 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 loans receivables portfolio using discounted cash flow models that have been internally developed. 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 loans receivables. When multiple inputs are used within the valuation techniques for loans receivables, a change in one input in a certain direction may be offset by an opposite change from another input.

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 loans 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 years ended March 31, 2022 and December 31, 2021:

	Three months Ended March 31, 2022			Year Ended December 31, 2021
Beginning balance	$	3,560,108		$	89,445
Purchases of loan participation		4,295,401			3,473,039
Interest and fees ⁽¹⁾		1,712,348			672,272
Collections		(1,906,930	)		(907,169	)
Net charge off ⁽¹⁾		(164,780	)		(146,923	)
Net change in fair value ⁽¹⁾		(358,644	)		379,444
Ending balance	$	7,137,503		$	3,560,108

⁽¹⁾

Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statement 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 March 31, 2022 and December 31, 2021:

	March 31, 2022									December 31, 2021
	Minimum			Maximum			Weighted Average (2)			Minimum			Maximum			Weighted Average
Estimated losses (1)		26.0	%		35.0	%		34.8	%		26.0	%		35.0	%		34.6	%
Servicing costs		-			-			4.0	%		-			-			4.6	%
Discount rate		-			-			11.4	%		-			-			11.1	%

(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 (retail and direct-to-consumer).

Other relevant data as of March 31, 2022 and December 31, 2021 concerning loans receivables at fair value are as follows:

	March 31, 2022		December 31, 2021
Aggregate fair value of loans receivables at fair value that are 90 days or more past due	$	253,418	$	-
Unpaid principal balance of loans receivables at fair value that are 90 days or more past due		372,059		-
Aggregate fair value of loans receivables at fair value in non-accrual status		-		-

Income Taxes - Deferred tax assets and liabilities are determined based on the estimated future tax effects of net operating loss carryforwards and temporary differences between the tax bases of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records a valuation allowance for its deferred tax assets when management concludes that it is not more likely than not that such assets will be recognized.

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 March 31, 2022, and 2021, the Company had not recorded any unrecognized tax benefits. Interest and penalties related to liabilities for uncertain tax positions will be charged to interest and operating expenses, respectively.

Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

LEASES

4. LEASES

Refer to Note 3 to these consolidated financial statements for further information about the Company’s revenue generating activities as a lessor. All the Company’s customer agreements are considered operating leases, and the Company currently does not have any sales-type or direct financing leases.

Lease Commitments

FlexShopper had a lease for retail store space in West Palm Beach, Florida. The term of the lease was to December 30, 2021. In March 2021, FlexShopper and the lessor agreed on the early termination of the lease for this property. The monthly rent for this space was approximately $2,300 per month.

In January 2019, FlexShopper entered into a 108-month lease with an option for one additional five-year term for 21,622 square feet of office space in Boca Raton, FL to accommodate FlexShopper’s business and its employees (the “January 2019 Lease”). The monthly rent for this space is approximately $31,500 with annual three percent increases throughout the initial 108-month lease term beginning on the anniversary of the commencement date.

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. The monthly rent for this space is approximately $6,900 per month. 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.

The rental expense for the three months ended March 31, 2022 and 2021 was approximately $179,000 and $167,000 respectively. At March 31, 2022, the future minimum annual lease payments are approximately as follows:

2022	$	348,000
2023		427,000
2024		435,000
2025		443,000
2026		456,000
Thereafter		774,000
	$	2,883,000

The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are included in the Company’s consolidated balance sheets beginning January 1, 2019.

Supplemental balance sheet information related to leases is as follows:

	Balance Sheet Classification	March 31, 2022		December 31, 2021
Assets
Operating Lease Asset	Property and Equipment, net	$	1,501,756	$	1,534,512
Finance Lease Asset	Property and Equipment, net		16,745		18,818
Total Lease Assets		$	1,518,501	$	1,553,330

Liabilities
Operating Lease Liability - current portion	Current Lease Liabilities	$	172,382	$	163,939
Finance Lease Liability - current portion	Current Lease Liabilities		8,815		8,793
Operating Lease Liability - net of current portion	Long Term Lease Liabilities		1,715,071		1,761,558
Finance Lease Liability - net of current portion	Long Term Lease Liabilities		10,952		13,065
Total Lease Liabilities		$	1,907,220	$	1,947,355

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 Average Discount Rate			Weighted Average Remaining Lease Term (in years)
Operating Leases		13.03	%		6
Finance Leases		13.34	%		2

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 and amounted to $97,592 and $104,031 for the three months ended March 31, 2022 and March 31, 2021, respectively.

Supplemental cash flow information related to operating leases is as follows:

	Three Months ended
	March 31,
	2022		2021
Cash payments for operating leases	$	100,356	$	104,573
Cash payments for finance leases		2,796		2,796

Below is a summary of undiscounted operating lease liabilities as of March 31, 2022. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the operating lease liabilities included in the consolidated balance sheet.

	Operating Leases
2022	$	305,086
2023		417,606
2024		430,134
2025		443,038
2026		456,330
2027 and thereafter		773,593
Total undiscounted cash flows		2,825,787
Less: interest		(938,334	)
Present value of lease liabilities	$	1,887,453

Below is a summary of undiscounted finance lease liabilities as of March 31, 2022. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance lease liabilities included in the consolidated balance sheet.

	Finance Leases
2022	$	8,388
2023		9,699
2024		4,782
Total undiscounted cash flows		22,869
Less: interest		(3,102	)
Present value of lease liabilities	$	19,767

Property and Equipment

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	Estimated Useful Lives	March 31, 2022			December 31, 2021
Furniture, fixtures and vehicle	2-5 years	$	391,669		$	391,669
Website, internal use software and data costs	3 years		17,464,227			16,186,179
Computers and software	3-7 years		2,557,737			2,281,975
			20,413,633			18,859,823
Less: accumulated depreciation and amortization			(13,508,240	)		(12,571,947	)
Right of use assets, net			1,518,501			1,553,330
		$	8,423,894		$	7,841,206

Depreciation and amortization expense were $936,293 and $650,627 for the three months ended March 31, 2022 and 2021, respectively.

Promissory Notes-Related Parties

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

PROMISSORY NOTES-RELATED PARTIES

6. PROMISSORY NOTES-RELATED PARTIES

122 Partners Note- On January 25, 2019, FlexShopper, LLC (the “Borrower”) entered into a subordinated debt financing letter agreement with 122 Partners, LLC, as lender, pursuant to which FlexShopper, LLC issued a subordinated promissory note to 122 Partners, LLC (the “122 Partners Note”) in the principal amount of $1,000,000. H. Russell Heiser, Jr., FlexShopper’s Chief Financial Officer, is a member of 122 Partners, LLC. Payment of the principal amount and accrued interest under the 122 Partners Note was due and payable by the borrower on April 30, 2020 and the borrower can prepay principal and interest at any time without penalty. Amounts outstanding under the 122 Partners Note bear interest at a rate equal to 5.00% per annum in excess of the non-default rate of interest from time to time in effect under the Credit Agreement. Obligations under the 122 Partners Note are subordinated to obligations under the Credit Agreement. The 122 Partners Note is subject to customary representations and warranties and events of default. If an event of default occurs and is continuing, the Borrower may be required to repay all amounts outstanding under the 122 Partners Note. Obligations under the 122 Partners Note are secured by substantially all of the Borrower’s assets, subject to the senior rights of the lenders under the Credit Agreement. On April 30, 2020, pursuant to an amendment to the subordinated debt financing letter agreement, the Borrower and 122 Partners, LLC agreed to extend the maturity date of the 122 Partners Note to April 30, 2021. On March 22, 2021, FlexShopper, LLC executed a second amendment to the 122 Partners Note such that the maturity date of the 122 Partners Note was extended to April 1, 2022. On March 31, 2022, FlexShopper, LLC executed a third amendment to the 122 Partners Note such that the maturity date of the 122 Partners Note was extended to April 1, 2023. No other changes were made to such Note. Principal and accrued and unpaid interest outstanding on the 122 Partners Note was $1,041,252 as of March 31, 2022 and $1,012,533 as of March 31, 2021.

Interests paid for the 122 Partner Note were $32,716 and $39,966 for the three months ended March 31, 2022 and 2021, respectively.

Interests expensed for the 122 Partner Note were $62,529 and $36,989 for the three months ended March 31, 2022 and 2021, respectively.

NRNS Note- FlexShopper LLC (the “Borrower”) previously entered into letter agreements with NRNS Capital Holdings LLC (“NRNS”), the manager of which is the Chairman of the Company’s Board of Directors, pursuant to which the Borrower issued subordinated promissory notes to NRNS (the “NRNS Note”) in the total principal amount of $3,750,000. Payment of principal and accrued interest under the NRNS Note was due and payable by the Borrower on June 30, 2021 and FlexShopper, LLC can prepay principal and interest at any time without penalty. Amounts outstanding under the NRNS Note bear interest at a rate equal to 5.00% per annum in excess of the non-default rate of interest from time to time in effect under the Credit Agreement. Obligations under the NRNS Note are subordinated to obligations under the Credit Agreement. The NRNS Note is subject to customary representations and warranties and events of default. If an event of default occurs and is continuing, the Borrower may be required to repay all amounts outstanding under the NRNS Note. Obligations under the NRNS Note is secured by substantially all of the Borrower’s assets, subject to rights of the lenders under the Credit Agreement. On March 22, 2021, FlexShopper, LLC executed an amendment to the NRNS Note such that the maturity date was extended to April 1, 2022. On February 2, 2022, FlexShopper LLC executed another amendment to the NRNS Note. This last amendment extended the maturity date from April 1, 2022 to July 1, 2024 and increased the credit commitment from $3,750,000 to $11,000,000. No other changes were made to such NRNS Note. Principal and accrued and unpaid interest outstanding on the NRNS Note was $6,933,875 as of March 31, 2022 and $3,797,278 as of March 31, 2021.

Interests paid for the NRNS Note were $151,286 and $150,087 for the three months ended March 31, 2022 and 2021, respectively.

Interests expensed for the NRNS Note were $292,238 and $139,053 for the three months ended March 31, 2022 and 2021, respectively.

Amounts payable under the promissory notes are as follows:

	Debt Principal		Interest
2022	$	-	$	225,127
2023	$	1,000,000	$	-
2024	$	6,750,000	$	-

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Loan Payable Under Credit Agreement

3 Months Ended

Mar. 31, 2022

Loan Payable Disclosure [Abstract]

LOAN PAYABLE UNDER CREDIT AGREEMENT

7. LOAN PAYABLE UNDER CREDIT AGREEMENT

On March 6, 2015, FlexShopper, through a wholly-owned subsidiary (“Borrower”), entered into a credit agreement (as amended from time-to-time, the “Credit Agreement”) with Wells Fargo Bank, National Association as paying agent, various lenders from time to time party thereto and WE 2014-1, LLC, an affiliate of Waterfall Asset Management, LLC, as administrative agent and lender (“Lender”). The Borrower is permitted to borrow funds under the Credit Agreement based on FlexShopper’s cash on hand and the Amortized Order Value of its Eligible Leases (as such terms are defined in the Credit Agreement) less certain deductions described in the Credit Agreement. Under the terms of the Credit Agreement, subject to the satisfaction of certain conditions, the Borrower may borrow up to $57,500,000 from the Lender until the Commitment Termination Date and must repay all borrowed amounts one year thereafter, on the date that is 12 months following the Commitment Termination Date (unless such amounts become due or payable on an earlier date pursuant to the terms of the Credit Agreement). The Lender was granted a security interest in certain leases as collateral under this Agreement.

On January 29, 2021, the Company and the Lender signed an Omnibus Amendment to the Credit Agreement. This Amendment extended the Commitment Termination Date to April 1, 2024, amended other covenant requirements, partially removed indebtedness covenants and amended eligibility rules. The interest rate charged on amounts borrowed is LIBOR plus 11% per annum. The Company paid the lender a fee of $237,000 in consideration of the execution of this Omnibus Amendment. At March 31, 2022, amounts borrowed bear interest at 11.40%.

On March 8, 2022, pursuant to Amendment No. 15 to Credit Agreement, the Commitment Amount was increased to be up to $82,500,000. The incremental increase in the Commitment Amount was provided by WE 2022-1, LLC, as an additional lender under the Credit Agreement. WE 2022-1, LLC is an affiliate of Waterfall Asset Management, LLC. No other changes were made to the credit agreement.

The Credit Agreement provides that FlexShopper may not incur additional indebtedness (other than expressly permitted indebtedness) without the permission of the Lender and also prohibits payments of cash dividends on common stock. Additionally, the Credit Agreement includes covenants requiring FlexShopper to maintain a minimum amount of Equity Book Value, maintain a minimum amount of liquidity and cash and maintain a certain ratio of Consolidated Total Debt to Equity Book Value (each capitalized term, as defined in the Credit Agreement). Upon a Permitted Change of Control (as defined in the Credit Agreement), FlexShopper must refinance the debt under the Credit Agreement, subject to the payment of an early termination fee. A summary of the covenant requirements, and FlexShopper’s actual results at March 31, 2022, follows:

	March 31, 2022
	Required Covenant		Actual Position
Equity Book Value not less than	$	9,636,387	$	14,204,970
Liquidity greater than		1,500,000		4,319,701
Cash greater than		500,000		4,319,701
Consolidated Total Debt to Equity Book Value ratio not to exceed		5.25		4.48

The Credit Agreement includes customary events of default, including, among others, failures to make payment of principal and interest, breaches or defaults under the terms of the Credit Agreement and related agreements entered into with the Lender, breaches of representations, warranties or certifications made by or on behalf of FlexShopper in the Credit Agreement and related documents (including certain financial and expense covenants), deficiencies in the borrowing base, certain judgments against FlexShopper and bankruptcy events.

As of March 31, 2022, the Company had $1,735,977 available under the Credit Agreement. Credit availability is subject to a borrowing base which is redetermined from time to time and based on specific advance rates on eligible current assets. As the Company continues to originate lease agreements, new leases will be eligible for the borrowing base and this will open more availability under the Credit Agreement.

Interest expense incurred under the Credit Agreement amounted to $1,551,844 for the three months ended March 31, 2022, and $1,125,239 for the three months ended March 31, 2021. The outstanding balance under the Credit Agreement was $56,150,000 as of March 31, 2022 and was $36,790,000 as of March 31, 2021. Such amount is presented in the consolidated balance sheet net of unamortized issuance costs of $450,679 and $499,661 as of March 31, 2022 and 2021, 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, 2024, or from reductions in the borrowing base. Accordingly, all principal is shown as a non-current liability at March 31, 2022.

On March 5, 2021, the applicable regulators announced that LIBOR will cease to be provided and will no longer be representative (i) immediately after December 31, 2021 for all sterling, euro, Swiss franc and Japanese yen settings, and the one-week and two-month U.S. dollar settings and (ii) immediately after June 30,2023 for the remaining U.S. dollar settings. The Company’s debt bears interest based on the one-month LIBOR rate. If there is a LIBOR Disruption Event as defined in the Credit Agreement, LIBOR will be replaced with the Prime Rate.

Capital Structure

3 Months Ended

Mar. 31, 2022

Stockholders' Equity Note [Abstract]

CAPITAL STRUCTURE

8. CAPITAL STRUCTURE

The Company’s capital structure consists of preferred and common stock as described below:

Preferred Stock

The Company is authorized to issue 500,000 shares of $0.001 par value preferred stock. Of this amount, 250,000 shares have been designated as Series 1 Convertible Preferred Stock and 25,000 shares have been designated as Series 2 Convertible Preferred Stock. The Company’s Board of Directors determines the rights and preferences of the Company’s preferred stock.

●	Series 1 Convertible Preferred Stock - Series 1 Convertible Preferred Stock ranks senior to common stock upon liquidation.

As of March 31, 2022, 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 March 31, 2022, 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 Company sold to B2 FIE V LLC (the “Investor”), an entity affiliated with Pacific Investment Management Company LLC, 20,000 shares of Series 2 Convertible Preferred Stock (“Series 2 Preferred Stock”) for gross proceeds of $20.0 million. The Company sold an additional 1,952 shares of Series 2 Preferred Stock to a different investor for gross proceeds of $1.95 million at a subsequent closing.

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 March 31, 2022 totaled approximately $13,880,950. As of March 31, 2022, each Series 2 Preferred Share was convertible into approximately 266 shares of common stock; however, the conversion rate is subject to further increase pursuant to a weighted average anti-dilution provision. The holders of the Series 2 Preferred Stock have the option to convert such shares into shares of common stock and have the right to vote with holders of common stock on an as-converted basis. If the average closing price during any 45-day consecutive trading day period or change of control transaction values the common stock at a price equal to or greater than $23.00 per share, then conversion shall be automatic. Upon a Liquidation Event or Deemed Liquidation Event (each as defined), holders of Series 2 Preferred Stock shall be entitled to receive out of the assets of the Company prior to and in preference to the common stock and Series 1 Convertible Preferred Stock an amount equal to the greater of (1) the Stated Value, plus any accrued and unpaid dividends thereon, and (2) the amount per share as would have been payable had all shares of Series 2 Preferred Stock been converted to common stock immediately before the Liquidation Event or Deemed Liquidation Event.

Common Stock

The Company is authorized to issue 40,000,000 shares of common stock, par value $0.0001 per share. Each share of common stock entitles the holder to one vote at all stockholder meetings. The common stock is traded on the Nasdaq Capital Market under the symbol “FPAY.”

Warrants

In September 2018, the Company issued warrants exercisable for 5,750,000 shares of common stock at an exercise price of $1.25 per share (the “Public Warrants”). The warrants were immediately exercisable and expire five years from the date of issuance. The warrants were listed on the Nasdaq Capital Market under the symbol “FPAYW”.

The Company also issued additional warrants exercisable for an aggregate 1,055,184 shares of common stock at an exercise price of $1.25 per warrant to Mr. Heiser and NRNS in connection with partial conversions of their promissory notes. The warrants are exercisable at $1.25 per share of common stock and expire on September 28, 2023.

In connection with the issuance of Series 2 Convertible Preferred Stock in June 2016, the Company issued to the placement agent in such offering warrants exercisable for 439 shares of Series 2 Convertible Preferred Stock at an initial exercise price of $1,250 per share, which expire seven years after the date of issuance.

As part of a consulting agreement with XLR8 Capital Partners LLC (the “Consulting Agreement”), an entity of which the Company’s Chairman is manager, the Company agreed to issue 40,000 warrants to XLR8 Capital Partners LLC monthly for 12 months beginning on March 1, 2019 at an exercise price of $1.25 per share or, if the closing share price on the last day of the month exceeds $1.25, then such exercise price will be 110% of the closing share price. The warrants are immediately exercisable and expire following the close of business on June 30, 2023. In February 2020, this agreement was extended for an additional six months through August 31, 2020. On August 30, 2020, the parties entered into an amendment to the Consulting Agreement to further extend the term for another six-month period through February 28, 2021. The Consulting Agreement automatically renewed for one successive six-month period, therefore the new termination date is August 31, 2021. There are no additional automatic renewals. The Consulting Agreement and amendments were approved by the Company’s Compensation Committee.

The August 2020 amendment also modified the alternative minimum exercise price of the monthly warrant consideration issuable to the Consultant to $1.60 per share going forward, and the expiration date of the warrants to the date that is four years following the last trading day of the calendar month relating to the applicable monthly warrant issuance.

During the three months ended March 31, 2021, the Company recorded an expense of $212,923 based on a weighted average grant date fair value of $1.77 per warrant.

	Warrants		Expense		Grant date fair value
Grant Date	Granted		Recorded		Per Warrant
January 31, 2021		40,000	$	73,595	$	1.84
February 28, 2021		40,000		76,318		1.91
March 31, 2021		40,000		63,010		1.58
		120,000		212,923		1.77

The following table summarizes information about outstanding stock warrants as of March 31, 2022, all of which are exercisable:

		Common		Series 2 Preferred			Weighted Average
Exercise		Stock Warrants		Stock Warrants			Remaining
Price		Outstanding		Outstanding			Contractual Life

$	1.25		1,055,184				1 year
$	1.25		160,000				1 year
$	1.34		40,000				1 year
$	1.40		40,000				1 year
$	1.54		40,000				1 year
$	1.62		40,000				1 year
$	1.68		40,000				3 years
$	1.69		40,000				1 year
$	1.74		40,000				1 year
$	1.76		40,000				1 year
$	1.91		40,000				1 year
$	1.95		40,000				3 years
$	2.00		40,000				1 year
$	2.01		40,000				1 year
$	2.08		40,000				3 years
$	2.45		40,000				1 year
$	2.53		40,000				1 year
$	2.57		40,000				3 years
$	2.70		40,000				4 years
$	2.78		40,000				1 year
$	2.79		40,000				4 years
$	2.89		40,000				4 years
$	2.93		40,000				1 year
$	2.97		40,000				4 years
$	3.09		40,000				4 years
$	3.17		40,000				4 years
$	3.19		40,000				4 years
$	3.27		40,000				4 years
$	1,250				439	*	1 year
			2,255,184		439

(*)

At March 31, 2022, these warrants were convertible into 116,903 shares of common stock

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Equity Compensation Plans

3 Months Ended

Mar. 31, 2022

Stock Options [Abstract]

EQUITY COMPENSATION PLANS

9. 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 of March 31, 2022, the Company granted under its equity compensation plans, stock options and performance share units (the “PSU”) and, approximately 720,000 shares remained available for issuance under the 2018 Plan.

Stock-based compensation expense include the following components:

	Three months ended March 31, 2022		Three months ended March 31, 2021
Stock options	$	291,283	$	380,263
Performance share units		13,946		-
Total stock-based compensation		305,229		380,263

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 consolidated statement of operations was $305,229 and $380,263 for the three months ended March 31, 2022 and March 31, 2021, respectively. Unrecognized compensation cost related to non-vested options and PSU at March 31, 2022 amounted to approximately $802,271, which is expected to be recognized over a weighted average period of 3.07 years

Stock options:

The fair value of stock-based compensation is recognized as compensation expense by 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) pricing model with the following weighted average assumptions:

	Three months ended March 31, 2022			Three months ended March 31, 2021
Exercise price	$	1.53 to 1.71		$	2.38 to 2.76
Expected life		6 years			5 years
Expected volatility		66.7	%		93	%
Dividend yield		0	%		0	%
Risk-free interest rate		1.8 to 2.4	%		0.31 to 0.93	%

The expected dividend yield is based on the Company’s historical dividend yield. The expected volatility is based on the historical volatility of the Company’s common stock. The expected life is based on the simplified expected term calculation permitted by the Securities and Exchange Commission (the “SEC”), which defines the expected life as the average of the contractual term of the options and the weighted-average vesting period for all option tranches. The risk-free interest rate is based on the annual yield on the grant date of a zero-coupon U.S. Treasury bond the maturity of which equals the option’s expected life.

Activity in stock options for the three months period ended March 31, 2022 and March 31, 2021 was as follows:

	Number of options			Weighted average exercise price		Weighted average contractual term (years)		Aggregate intrinsic value
Outstanding at January 1, 2022		3,080,904		$	2.06			$	1,923,642
Granted		951,944			1.54				-
Exercised		(162,956	)		.84				204,030
Forfeited		(7,333	)		2.22				2,273
Expired		(25,000	)		1.70				-
Outstanding at March 31, 2022		3,837,559		$	1.98		7.34	$	925,306
Vested and exercisable at March 31, 2022		2,508,822		$	1.25		6.58	$	731,891

Outstanding at January 1, 2021		2,595,700		$	1.92			$	-
Granted		543,397			2.48				-
Exercised		(16,000	)		.81				40,010
Forfeited		(4,667	)		.82				9,564
Outstanding at March 31, 2021		3,118,730		$	2.03		7.39	$	2,681,180
Vested and exercisable at March 31, 2021		1,819,541		$	1.95		7.68	$	2,029,793

The weighted average grant date fair value of options granted during the three month period ended March 31, 2022 and March 31, 2021 was $0.92 and $1.76 per share respectively.

Performance Share Units:

On February 10, 2022, the Compensation Committee of the Board of Directors approved awards of performance share units to certain senior executives of the Company.

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 as adjusted EBITDA of the Company. 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 performance-based shares which could potentially be issued ranges from 0 up to a maximum of 790,327 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.

Activity in performance share units for the three months ended March 31, 2022 was as follows:

	Number of performance share units		Weighted average grant date fair value
Non- vested at January 1, 2022	-		-
Granted		790,327	$	1.53
Forfeited/ unearned		-		-
Vested		-		-
Non- vested at March 31, 2022		790,327	$	1.53

Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

10. INCOME TAXES

Effective income tax rates for interim periods are based on our estimate of the applicable annual income tax rate. The Company’s effective income tax rate varies based upon the estimate of our annual taxable earnings and the allocation of those taxable earnings across the various states in which we operate. Changes in the annual allocation of the Company’s activity among these jurisdictions results in changes to the effective tax rate utilized to measure the Company’s income tax provision and deferred tax assets and liabilities

The Company’s effective income tax rate for the three months ended March 31, 2022 was approximately 27%. This was different than the expected federal income tax rate of 21% primarily due to the impact of the valuation allowance provided against our deferred tax assets. Non-taxable income from non-deductible equity compensation and state income taxes also impacted the effective tax rate.

Management believes that certain federal and state deferred tax assets as of March 31, 2022 do not satisfy the realization criteria and has recorded a valuation allowance to reduce the carrying value of the Company’s deferred tax assets to the extent that realization is not more likely than not. Deferred tax liabilities are recorded to the extent that reversing taxable temporary differences cannot be offset with existing deferred tax assets.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Contingencies and Other Uncertainties

3 Months Ended

Mar. 31, 2022

Loss Contingency [Abstract]

CONTINGENCIES AND OTHER UNCERTAINTIES

11. CONTINGENCIES AND OTHER UNCERTAINTIES

Regulatory inquiries

In the first quarter of 2021, FlexShopper, along with a number of other lease-to-own companies, received a subpoena from the California Department of Financial Protection and Innovation (the “DFPI”) requesting the production of documents and information regarding the Company’s compliance with state consumer protection laws. The Company is cooperatively engaging with the DFPI in response to its inquiry. Although the Company believes it is in compliance with all applicable consumer protection laws and regulations in California, this inquiry ultimately could lead to an enforcement action and/or a consent order, and substantial costs, including legal fees, fines, penalties, and remediation expenses.

COVID-19

The extent of the impact and effects of the recent outbreak of the coronavirus (COVID-19) on the operation and financial performance of our business will depend on future developments, including the duration and spread of the outbreak, the recovery time of the disrupted supply chains, or the uncertainty with respect to the accessibility of additional liquidity or capital markets, all of which are highly uncertain and cannot be predicted. If the demand for the Company’s leases is impacted by this outbreak for an extended period, our results of operations may be materially adversely affected.

- Definition

The entire disclosure for loss and gain contingencies. Describes any existing condition, situation, or set of circumstances involving uncertainty as of the balance sheet date (or prior to issuance of the financial statements) as to a probable or reasonably possible loss incurred by an entity that will ultimately be resolved when one or more future events occur or fail to occur, and typically discloses the amount of loss recorded or a range of possible loss, or an assertion that no reasonable estimate can be made.

+ References + Details

Commitments

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS

12. COMMITMENTS

The Company does not have any commitments other than real property leases (Note 4).

Promissory Note- Paycheck Protection Program

3 Months Ended

Mar. 31, 2022

Pay Check Protection Programs [Abstract]

PROMISSORY NOTE- PAYCHECK PROTECTION PROGRAM

13. PROMISSORY NOTE- PAYCHECK PROTECTION PROGRAM

FlexShopper, LLC (the “Borrower”) applied for and received a loan (the “Loan”) on May 4, 2020, from Customers Bank (the “Lender”) in the principal amount of $1,914,100, pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted March 27, 2020, and administered through the U.S. Small Business Administration.

The Loan was evidenced by a promissory note (the “Note”), dated April 30, 2020, issued by the Borrower to the Lender. The Note matured on April 30, 2022 and bore interest at the rate of 1.00% per annum, payable monthly commencing on November 30, 2020, following an initial deferral period as specified under the PPP. The Note might be prepaid by the Borrower at any time prior to maturity with no prepayment penalty. Proceeds from the Loan were available to the Borrower to fund designated expenses, including certain payroll costs, group health care benefits and other permitted expenses, in accordance with the PPP. Under the terms of the PPP, up to the entire sum of the principal amount and accrued interest might be forgiven to the extent the Loan proceeds were used for qualifying expenses as described in the CARES Act and applicable implementing guidance issued by the U.S. Small Business Administration under the PPP.

On June 21, 2021 we were notified that effective April 7, 2021, the U.S. Small Business Administration confirmed the waiver of FlexShopper’s repayment of a $1,914,000 Paycheck Protection Program promissory note issued to the Company on May 4, 2020.

As a result of the PPP promissory note forgiveness, the Company recognized in the year ended December 31, 2021 a gain from the extinguishment of the loan, including accrued interest, of $1,931,825.

Accounting Policies, by Policy (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Principles of Consolidation

Estimates

Revenue Recognition

Accounts Receivable and Allowance for Doubtful Accounts

	March 31, 2022			December 31, 2021

Accounts receivable	$	51,988,768		$	54,042,161
Allowance for doubtful accounts		(22,450,828	)		(27,703,278	)
Accounts receivable, net	$	29,537,940		$	26,338,883

	Three Months Ended March 31, 2022			Year Ended December 31, 2021
Beginning balance	$	27,703,278		$	22,138,541
Provision		11,831,117			40,342,618
Accounts written off		(17,083,567	)		(34,777,881	)
Ending balance	$	22,450,828		$	27,703,278

Lease Merchandise

The net leased merchandise balances consisted of the following as of March 31, 2022 and December 31, 2021:

	March 31, 2022			December 31, 2021
Lease merchandise at cost	$	68,614,211		$	72,159,063
Accumulated depreciation		(29,574,842	)		(29,505,431	)
Impairment reserve		(2,441,540	)		(1,711,520	)
Lease merchandise, net	$	36,597,829		$	40,942,112

Cost of lease merchandise sold represents the undepreciated cost of rental merchandise at the time of sale.

Loans receivable at fair value

Further details concerning loans receivable are presented within “Fair Value Measurement” section in this Note.

Lease accounting

Lease accounting

The breakout of lease revenues and fees, net of lessor bad debt expense, that ties the condensed consolidated statements of operations is shown below:

	Three Months ended
	March 31,
	2022			2021
Lease billings and accruals	$	39,597,429		$	41,584,680
Provision for doubtful accounts		(11,831,117	)		(8,833,349	)
Lease revenues and fees	$	27,766,312		$	32,751,331

Deferred Debt Issuance Costs

Operating Expenses - Operating expenses include corporate overhead expenses such as salaries, stock-based compensation, insurance, occupancy, and other administrative expenses.

Marketing Costs

Per Share Data

	Three Months ended
	March 31,
	2022		2021
Series 1 Convertible Preferred Stock		225,231		225,231
Series 2 Convertible Preferred Stock		5,845,695		5,845,695
Series 2 Convertible Preferred Stock issuable upon exercise of warrants		116,903		116,903
Common Stock Options		3,837,559		3,118,730
Common Stock Warrants		2,255,184		2,232,488
Performance Share Units		790,327		-
		13,070,899		11,539,047

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2022 and 2021:

	Three Months ended
	March 31,
	2022			2021
Numerator
Net (loss)/income	$	(2,380,935	)	$	1,237
Convertible Series 2 Preferred Share dividends		(609,777	)		(609,772	)
Net loss attributable to common and Series 1 Convertible Preferred Shareholders - Numerator for basic and diluted EPS	$	(2,990,712	)	$	(608,535	)
Denominator
Denominator for basic and diluted EPS- weighted average shares		21,547,069			21,369,904
Basic EPS	$	(0.14	)		(0.03	)
Diluted EPS	$	(0.14	)		(0.03	)

Stock-Based Compensation

Fair Value of Financial Instruments

The Company utilizes the fair value option on its entire loans receivable portfolio purchased from its bank partner.

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.

The Company’s financial instruments that are measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 is as follows:

	Fair Value Measurement Using
Financial instruments – As of March 31, 2022 (1)	Level 1		Level 2		Level 3		Carrying Amount
Loans receivable	$	-	$	-	$	7,137,503	$	7,137,503

	Fair Value Measurement Using
Financial instruments – As of December 31, 2021 (1)	Level 1		Level 2		Level 3		Carrying Amount
Loans receivable	$	-	$	-	$	3,560,108	$	3,560,108

The following describes the primary inputs to the discounted cash flow models that require significant judgement:

●

	Three months Ended March 31, 2022			Year Ended December 31, 2021
Beginning balance	$	3,560,108		$	89,445
Purchases of loan participation		4,295,401			3,473,039
Interest and fees ⁽¹⁾		1,712,348			672,272
Collections		(1,906,930	)		(907,169	)
Net charge off ⁽¹⁾		(164,780	)		(146,923	)
Net change in fair value ⁽¹⁾		(358,644	)		379,444
Ending balance	$	7,137,503		$	3,560,108

⁽¹⁾

Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statement of operations

	March 31, 2022									December 31, 2021
	Minimum			Maximum			Weighted Average (2)			Minimum			Maximum			Weighted Average
Estimated losses (1)		26.0	%		35.0	%		34.8	%		26.0	%		35.0	%		34.6	%
Servicing costs		-			-			4.0	%		-			-			4.6	%
Discount rate		-			-			11.4	%		-			-			11.1	%

(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 (retail and direct-to-consumer).

Other relevant data as of March 31, 2022 and December 31, 2021 concerning loans receivables at fair value are as follows:

	March 31, 2022		December 31, 2021
Aggregate fair value of loans receivables at fair value that are 90 days or more past due	$	253,418	$	-
Unpaid principal balance of loans receivables at fair value that are 90 days or more past due		372,059		-
Aggregate fair value of loans receivables at fair value in non-accrual status		-		-

Income Taxes

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Schedule of accounts receivable

	March 31, 2022			December 31, 2021

Accounts receivable	$	51,988,768		$	54,042,161
Allowance for doubtful accounts		(22,450,828	)		(27,703,278	)
Accounts receivable, net	$	29,537,940		$	26,338,883

Schedule of allowance for doubtful accounts

	Three Months Ended March 31, 2022			Year Ended December 31, 2021
Beginning balance	$	27,703,278		$	22,138,541
Provision		11,831,117			40,342,618
Accounts written off		(17,083,567	)		(34,777,881	)
Ending balance	$	22,450,828		$	27,703,278

Schedule of net leased merchandise

	March 31, 2022			December 31, 2021
Lease merchandise at cost	$	68,614,211		$	72,159,063
Accumulated depreciation		(29,574,842	)		(29,505,431	)
Impairment reserve		(2,441,540	)		(1,711,520	)
Lease merchandise, net	$	36,597,829		$	40,942,112

Schedule of lessor revenues and fees

	Three Months ended
	March 31,
	2022			2021
Lease billings and accruals	$	39,597,429		$	41,584,680
Provision for doubtful accounts		(11,831,117	)		(8,833,349	)
Lease revenues and fees	$	27,766,312		$	32,751,331

Schedule of series1 convertible preferred stock and series 2 convertible preferred stock due to anti-dilution

	Three Months ended
	March 31,
	2022		2021
Series 1 Convertible Preferred Stock		225,231		225,231
Series 2 Convertible Preferred Stock		5,845,695		5,845,695
Series 2 Convertible Preferred Stock issuable upon exercise of warrants		116,903		116,903
Common Stock Options		3,837,559		3,118,730
Common Stock Warrants		2,255,184		2,232,488
Performance Share Units		790,327		-
		13,070,899		11,539,047

Schedule of basic and diluted earnings per share

	Three Months ended
	March 31,
	2022			2021
Numerator
Net (loss)/income	$	(2,380,935	)	$	1,237
Convertible Series 2 Preferred Share dividends		(609,777	)		(609,772	)
Net loss attributable to common and Series 1 Convertible Preferred Shareholders - Numerator for basic and diluted EPS	$	(2,990,712	)	$	(608,535	)
Denominator
Denominator for basic and diluted EPS- weighted average shares		21,547,069			21,369,904
Basic EPS	$	(0.14	)		(0.03	)
Diluted EPS	$	(0.14	)		(0.03	)

Schedule of fair value assets measured on recurring basis

	Fair Value Measurement Using
Financial instruments – As of March 31, 2022 (1)	Level 1		Level 2		Level 3		Carrying Amount
Loans receivable	$	-	$	-	$	7,137,503	$	7,137,503

	Fair Value Measurement Using
Financial instruments – As of December 31, 2021 (1)	Level 1		Level 2		Level 3		Carrying Amount
Loans receivable	$	-	$	-	$	3,560,108	$	3,560,108

Schedule of fair value assets measured on recurring basis, unobservable input reconciliation

	Three months Ended March 31, 2022			Year Ended December 31, 2021
Beginning balance	$	3,560,108		$	89,445
Purchases of loan participation		4,295,401			3,473,039
Interest and fees ⁽¹⁾		1,712,348			672,272
Collections		(1,906,930	)		(907,169	)
Net charge off ⁽¹⁾		(164,780	)		(146,923	)
Net change in fair value ⁽¹⁾		(358,644	)		379,444
Ending balance	$	7,137,503		$	3,560,108

⁽¹⁾

Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statement of operations

Schedule of quantitative information about the inputs used in fair value measurement

	March 31, 2022									December 31, 2021
	Minimum			Maximum			Weighted Average (2)			Minimum			Maximum			Weighted Average
Estimated losses (1)		26.0	%		35.0	%		34.8	%		26.0	%		35.0	%		34.6	%
Servicing costs		-			-			4.0	%		-			-			4.6	%
Discount rate		-			-			11.4	%		-			-			11.1	%

(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 (retail and direct-to-consumer).

Schedule of concerning loan receivables at fair value

	March 31, 2022		December 31, 2021
Aggregate fair value of loans receivables at fair value that are 90 days or more past due	$	253,418	$	-
Unpaid principal balance of loans receivables at fair value that are 90 days or more past due		372,059		-
Aggregate fair value of loans receivables at fair value in non-accrual status		-		-

Leases (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Schedule of undiscounted finance lease liabilities

2022	$	348,000
2023		427,000
2024		435,000
2025		443,000
2026		456,000
Thereafter		774,000
	$	2,883,000

Schedule of balance sheet information related to leases

	Balance Sheet Classification	March 31, 2022		December 31, 2021
Assets
Operating Lease Asset	Property and Equipment, net	$	1,501,756	$	1,534,512
Finance Lease Asset	Property and Equipment, net		16,745		18,818
Total Lease Assets		$	1,518,501	$	1,553,330

Liabilities
Operating Lease Liability - current portion	Current Lease Liabilities	$	172,382	$	163,939
Finance Lease Liability - current portion	Current Lease Liabilities		8,815		8,793
Operating Lease Liability - net of current portion	Long Term Lease Liabilities		1,715,071		1,761,558
Finance Lease Liability - net of current portion	Long Term Lease Liabilities		10,952		13,065
Total Lease Liabilities		$	1,907,220	$	1,947,355

Schedule of weighted-average discount rate and weighted-average remaining lease term

	Weighted Average Discount Rate			Weighted Average Remaining Lease Term (in years)
Operating Leases		13.03	%		6
Finance Leases		13.34	%		2

Schedule of supplemental cash flow information related to operating leases

	Three Months ended
	March 31,
	2022		2021
Cash payments for operating leases	$	100,356	$	104,573
Cash payments for finance leases		2,796		2,796

Schedule of undiscounted operating lease liabilities

	Operating Leases
2022	$	305,086
2023		417,606
2024		430,134
2025		443,038
2026		456,330
2027 and thereafter		773,593
Total undiscounted cash flows		2,825,787
Less: interest		(938,334	)
Present value of lease liabilities	$	1,887,453

Schedule of undiscounted finance lease liabilities

	Finance Leases
2022	$	8,388
2023		9,699
2024		4,782
Total undiscounted cash flows		22,869
Less: interest		(3,102	)
Present value of lease liabilities	$	19,767

Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

	Estimated Useful Lives	March 31, 2022			December 31, 2021
Furniture, fixtures and vehicle	2-5 years	$	391,669		$	391,669
Website, internal use software and data costs	3 years		17,464,227			16,186,179
Computers and software	3-7 years		2,557,737			2,281,975
			20,413,633			18,859,823
Less: accumulated depreciation and amortization			(13,508,240	)		(12,571,947	)
Right of use assets, net			1,518,501			1,553,330
		$	8,423,894		$	7,841,206

Promissory Notes-Related Parties (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule of amounts payable under the promissory notes

	Debt Principal		Interest
2022	$	-	$	225,127
2023	$	1,000,000	$	-
2024	$	6,750,000	$	-

Loan Payable Under Credit Agreement (Tables)

3 Months Ended

Mar. 31, 2022

Loan Payable Disclosure [Abstract]

Schedule of covenant requirements, and flexshopper's actual results

	March 31, 2022
	Required Covenant		Actual Position
Equity Book Value not less than	$	9,636,387	$	14,204,970
Liquidity greater than		1,500,000		4,319,701
Cash greater than		500,000		4,319,701
Consolidated Total Debt to Equity Book Value ratio not to exceed		5.25		4.48

Capital Structure (Tables)

3 Months Ended

Mar. 31, 2022

Stockholders' Equity Note [Abstract]

Schedule of weighted average valuation

	Warrants		Expense		Grant date fair value
Grant Date	Granted		Recorded		Per Warrant
January 31, 2021		40,000	$	73,595	$	1.84
February 28, 2021		40,000		76,318		1.91
March 31, 2021		40,000		63,010		1.58
		120,000		212,923		1.77

Schedule of outstanding stock warrants

		Common		Series 2 Preferred			Weighted Average
Exercise		Stock Warrants		Stock Warrants			Remaining
Price		Outstanding		Outstanding			Contractual Life

$	1.25		1,055,184				1 year
$	1.25		160,000				1 year
$	1.34		40,000				1 year
$	1.40		40,000				1 year
$	1.54		40,000				1 year
$	1.62		40,000				1 year
$	1.68		40,000				3 years
$	1.69		40,000				1 year
$	1.74		40,000				1 year
$	1.76		40,000				1 year
$	1.91		40,000				1 year
$	1.95		40,000				3 years
$	2.00		40,000				1 year
$	2.01		40,000				1 year
$	2.08		40,000				3 years
$	2.45		40,000				1 year
$	2.53		40,000				1 year
$	2.57		40,000				3 years
$	2.70		40,000				4 years
$	2.78		40,000				1 year
$	2.79		40,000				4 years
$	2.89		40,000				4 years
$	2.93		40,000				1 year
$	2.97		40,000				4 years
$	3.09		40,000				4 years
$	3.17		40,000				4 years
$	3.19		40,000				4 years
$	3.27		40,000				4 years
$	1,250				439	*	1 year
			2,255,184		439

(*)

At March 31, 2022, these warrants were convertible into 116,903 shares of common stock

Equity Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of stock-based compensation expense

	Three months ended March 31, 2022		Three months ended March 31, 2021
Stock options	$	291,283	$	380,263
Performance share units		13,946		-
Total stock-based compensation		305,229		380,263

Schedule of measured fair value of each option award grant using the black-scholes-merton (BSM) pricing model

	Three months ended March 31, 2022			Three months ended March 31, 2021
Exercise price	$	1.53 to 1.71		$	2.38 to 2.76
Expected life		6 years			5 years
Expected volatility		66.7	%		93	%
Dividend yield		0	%		0	%
Risk-free interest rate		1.8 to 2.4	%		0.31 to 0.93	%

Schedule of stock option

	Number of options			Weighted average exercise price		Weighted average contractual term (years)		Aggregate intrinsic value
Outstanding at January 1, 2022		3,080,904		$	2.06			$	1,923,642
Granted		951,944			1.54				-
Exercised		(162,956	)		.84				204,030
Forfeited		(7,333	)		2.22				2,273
Expired		(25,000	)		1.70				-
Outstanding at March 31, 2022		3,837,559		$	1.98		7.34	$	925,306
Vested and exercisable at March 31, 2022		2,508,822		$	1.25		6.58	$	731,891

Outstanding at January 1, 2021		2,595,700		$	1.92			$	-
Granted		543,397			2.48				-
Exercised		(16,000	)		.81				40,010
Forfeited		(4,667	)		.82				9,564
Outstanding at March 31, 2021		3,118,730		$	2.03		7.39	$	2,681,180
Vested and exercisable at March 31, 2021		1,819,541		$	1.95		7.68	$	2,029,793

Schedule of activity in performance share units

	Number of performance share units		Weighted average grant date fair value
Non- vested at January 1, 2022	-		-
Granted		790,327	$	1.53
Forfeited/ unearned		-		-
Vested		-		-
Non- vested at March 31, 2022		790,327	$	1.53

Business (Details)	Mar. 31, 2022
Business (Details) [Line Items]
Ownership percentage	100.00%
FlexLending, LLC [Member]
Business (Details) [Line Items]
Ownership percentage	100.00%

Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Summary of Significant Accounting Policies (Details) [Line Items]
Accounts receivable charged off against allowance	$ 17,083,567	$ 7,036,164
Loan description	The third-party retains 5% of the balance of all loans originated and sells a 95% loan participation to the Company.
Amortization included in interest expense	$ 49,329	88,521
Intangible assets, terms	10 years
Amortization of intangible assets	$ 769
Capitalized software costs	984,994	588,992
Capitalized software amortization expense	621,694	570,567
Capitalized data costs	293,054	0
Capitalized data costs amortization expense	$ 88,721	0
Largest benefit percentage	50.00%
Promissory Notes [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Amortization included in interest expense	$ 1,274	$ 3,183

Summary of Significant Accounting Policies (Details) - Schedule of accounts receivable - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Schedule of accounts receivable [Abstract]
Accounts receivable	$ 51,988,768	$ 54,042,161
Allowance for doubtful accounts	(22,450,828)	(27,703,278)
Accounts receivable, net	$ 29,537,940	$ 26,338,883

Summary of Significant Accounting Policies (Details) - Schedule of allowance for doubtful accounts - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Schedule of allowance for doubtful accounts [Abstract]
Beginning balance	$ 27,703,278	$ 22,138,541
Provision	11,831,117	40,342,618
Accounts written off	(17,083,567)	(34,777,881)
Ending balance	$ 22,450,828	$ 27,703,278

Summary of Significant Accounting Policies (Details) - Schedule of net leased merchandise - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Schedule of net leased merchandise [Abstract]
Lease merchandise at cost	$ 68,614,211	$ 72,159,063
Accumulated depreciation	(29,574,842)	(29,505,431)
Impairment reserve	(2,441,540)	(1,711,520)
Lease merchandise, net	$ 36,597,829	$ 40,942,112

Summary of Significant Accounting Policies (Details) - Schedule of lessor revenues and fees - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Schedule of lessor revenues and fees [Abstract]
Lease billings and accruals	$ 39,597,429	$ 41,584,680
Provision for doubtful accounts	(11,831,117)	(8,833,349)
Lease revenues and fees	$ 27,766,312	$ 32,751,331

Summary of Significant Accounting Policies (Details) - Schedule of series1 convertible preferred stock and series 2 convertible preferred stock due to anti-dilution - shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	13,070,899	11,539,047
Common Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	3,837,559	3,118,730
Common Stock Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	2,255,184	2,232,488
Performance Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	790,327
Series 1 Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	225,231	225,231
Series 2 Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	5,845,695	5,845,695
Series 2 Convertible Preferred Stock issuable upon exercise of warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	116,903	116,903

Summary of Significant Accounting Policies (Details) - Schedule of basic and diluted earnings per share - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Numerator
Net (loss)/income	$ (2,380,935)	$ 1,237
Convertible Series 2 Preferred Share dividends	(609,777)	(609,772)
Net loss attributable to common and Series 1 Convertible Preferred Shareholders - Numerator for basic and diluted EPS	$ (2,990,712)	$ (608,535)
Denominator
Denominator for basic and diluted EPS- weighted average shares (in Shares)	21,547,069	21,369,904
Basic EPS (in Dollars per share)	$ (0.14)	$ (0.03)
Diluted EPS (in Dollars per share)	$ (0.14)	$ (0.03)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

Summary of Significant Accounting Policies (Details) - Schedule of fair value assets measured on recurring basis - Fair Value, Recurring [Member] - USD ($)

Mar. 31, 2022

Dec. 31, 2021

Summary of Significant Accounting Policies (Details) - Schedule of fair value assets measured on recurring basis [Line Items]

Loans receivable

^[1]

$ 7,137,503

$ 3,560,108

Level 1 [Member]

Summary of Significant Accounting Policies (Details) - Schedule of fair value assets measured on recurring basis [Line Items]

Loans receivable

^[1]

Level 2 [Member]

Summary of Significant Accounting Policies (Details) - Schedule of fair value assets measured on recurring basis [Line Items]

Loans receivable

^[1]

Level 3 [Member]

Summary of Significant Accounting Policies (Details) - Schedule of fair value assets measured on recurring basis [Line Items]

Loans receivable

^[1]

$ 7,137,503

$ 3,560,108

[1]

For cash, accounts 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 increased by unamortized issuance costs 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 Accounting Policies (Details) - Schedule of fair value assets measured on recurring basis, unobservable input reconciliation - Level 3 [Member] - USD ($)

3 Months Ended

12 Months Ended

Mar. 31, 2022

Dec. 31, 2021

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]

Beginning balance

$ 3,560,108

$ 89,445

Purchases of loan participation

4,295,401

3,473,039

Interest and fees

^[1]

1,712,348

672,272

Collections

(1,906,930)

(907,169)

Net charge off

^[1]

(164,780)

(146,923)

Net change in fair value

^[1]

(358,644)

379,444

Ending balance

$ 7,137,503

$ 3,560,108

[1]	Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statement of operations

Summary of Significant Accounting Policies (Details) - Schedule of quantitative information about the inputs used in fair value measurement

Mar. 31, 2022

Dec. 31, 2021

Minimum [Member]

Summary of Significant Accounting Policies (Details) - Schedule of quantitative information about the inputs used in fair value measurement [Line Items]

Estimated losses

^[1]

26.00%

Servicing costs

Discount rate

Maximum [Member]

Summary of Significant Accounting Policies (Details) - Schedule of quantitative information about the inputs used in fair value measurement [Line Items]

Estimated losses

^[1]

35.00%

Servicing costs

Discount rate

Weighted Average [Member]

Summary of Significant Accounting Policies (Details) - Schedule of quantitative information about the inputs used in fair value measurement [Line Items]

Estimated losses

^[1]

34.80%

^[2]

34.60%

Servicing costs

4.00%

^[2]

4.60%

Discount rate

11.40%

^[2]

11.10%

[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 (retail and direct-to-consumer).

Summary of Significant Accounting Policies (Details) - Schedule of concerning loan receivables at fair value - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Schedule of concerning loan receivables at fair value [Abstract]
Aggregate fair value of loans receivables at fair value that are 90 days or more past due	$ 253,418
Unpaid principal balance of loans receivables at fair value that are 90 days or more past due	372,059
Aggregate fair value of loans receivables at fair value in non-accrual status

Leases (Details)		1 Months Ended	3 Months Ended
Leases (Details)	Jan. 31, 2019 USD ($) m²	Sep. 30, 2021 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)
Leases [Abstract]
Monthly rent			$ 2,300
Term of lease	108 months			12 months
Area of land (in Square Meters) \| m²	21,622
Exercise of stock options into common stock	$ 31,500
Annual percentage	3.00%
Monthly rent		$ 6,900
Rental expense			179,000	$ 167,000
Operating lease costs			$ 97,592	$ 104,031

Leases (Details) - Schedule of the future minimum annual lease payments	Mar. 31, 2022 USD ($)
Schedule of the future minimum annual lease payments [Abstract]
2022	$ 348,000
2023	427,000
2024	435,000
2025	443,000
2026	456,000
Thereafter	774,000
Total	$ 2,883,000

Leases (Details) - Schedule of balance sheet information related to leases - USD ($)	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Assets
Total Lease Assets	$ 1,518,501	$ 1,553,330
Liabilities
Total Lease Liabilities	$ 1,907,220	1,947,355
Property and Equipment, net [Member]
Assets
Balance Sheet Classification, Operating Lease Asset	Property and Equipment, net
Operating Lease Asset	$ 1,501,756	1,534,512
Balance Sheet Classification, Finance Lease Asset	Property and Equipment, net
Finance Lease Asset	$ 16,745	18,818
Current Lease Liabilities [Member]
Liabilities
Balance Sheet Classification, Operating Lease Liability - current portion	Current Lease Liabilities
Operating Lease Liability - current portion	$ 172,382	163,939
Balance Sheet Classification, Finance Lease Liability - current portion	Current Lease Liabilities
Finance Lease Liability - current portion	$ 8,815	8,793
Long Term Lease Liabilities [Member]
Liabilities
Balance Sheet Classification, Operating Lease Liability - net of current portion	Long Term Lease Liabilities
Operating Lease Liability - net of current portion	$ 1,715,071	1,761,558
Balance Sheet Classification, Finance Lease Liability - net of current portion	Long Term Lease Liabilities
Finance Lease Liability - net of current portion	$ 10,952	$ 13,065

Leases (Details) - Schedule of weighted-average discount rate and weighted-average remaining lease term	Mar. 31, 2022
Operating Leases [Member]
Leases (Details) - Schedule of weighted-average discount rate and weighted-average remaining lease term [Line Items]
Weighted Average Discount Rate	13.03%
Weighted Average Remaining Lease Term (in years)	6 years
Finance Leases [Member]
Leases (Details) - Schedule of weighted-average discount rate and weighted-average remaining lease term [Line Items]
Weighted Average Discount Rate	13.34%
Weighted Average Remaining Lease Term (in years)	2 years

Leases (Details) - Schedule of supplemental cash flow information related to operating leases - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Schedule of supplemental cash flow information related to operating leases [Abstract]
Cash payments for operating leases	$ 100,356	$ 104,573
Cash payments for finance leases	$ 2,796	$ 2,796

Leases (Details) - Schedule of undiscounted operating lease liabilities	Mar. 31, 2022 USD ($)
Schedule of undiscounted operating lease liabilities [Abstract]
2022	$ 305,086
2023	417,606
2024	430,134
2025	443,038
2026	456,330
2027 and thereafter	773,593
Total undiscounted cash flows	2,825,787
Less: interest	(938,334)
Present value of lease liabilities	$ 1,887,453

Leases (Details) - Schedule of undiscounted finance lease liabilities - Finance Leases [Member]	Mar. 31, 2022 USD ($)
Leases (Details) - Schedule of undiscounted finance lease liabilities [Line Items]
2022	$ 8,388
2023	9,699
2024	4,782
Total undiscounted cash flows	22,869
Less: interest	(3,102)
Present value of lease liabilities	$ 19,767

Property and Equipment (Details) - USD ($)	3 Months Ended
Property and Equipment (Details) - USD ($)	Mar. 31, 2022	Mar. 31, 2021
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 936,293	$ 650,627

Property and Equipment (Details) - Schedule of property and equipment - USD ($)	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 20,413,633	$ 18,859,823
Property plant and equipment other accumulated depreciation	(13,508,240)	(12,571,947)
Right of use assets, net	1,518,501	1,553,330
Property and equipment, net	8,423,894	7,841,206
Furniture, fixtures and vehicle [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 391,669	391,669
Furniture, fixtures and vehicle [Member] \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	2 years
Furniture, fixtures and vehicle [Member] \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	5 years
Website, internal use software and data costs [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Property and equipment, gross	$ 17,464,227	16,186,179
Computers and software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,557,737	$ 2,281,975
Computers and software [Member] \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Computers and software [Member] \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	7 years

Promissory Notes-Related Parties (Details) - USD ($)	3 Months Ended
Promissory Notes-Related Parties (Details) - USD ($)	Mar. 31, 2022	Mar. 31, 2021	Jan. 25, 2019
Promissory Notes-Related Parties (Details) [Line Items]
Principal accrued unpaid interest outstanding	$ 1,041,252	$ 1,012,533
Interests paid	32,716	39,966
Interests expensed	$ 62,529	36,989
Description of notes	This last amendment extended the maturity date from April 1, 2022 to July 1, 2024 and increased the credit commitment from $3,750,000 to $11,000,000.
Nrns [Member]
Promissory Notes-Related Parties (Details) [Line Items]
Debt principal amount	$ 3,750,000
Bear interest rate	5.00%
Principal accrued unpaid interest outstanding	$ 6,933,875	3,797,278
Interests paid	151,286	150,087
Interests expensed	$ 292,238	$ 139,053
Chief Financial Officer [Member]
Promissory Notes-Related Parties (Details) [Line Items]
Debt principal amount			$ 1,000,000
Bear interest rate	5.00%

Promissory Notes-Related Parties (Details) - Schedule of amounts payable under the promissory notes	3 Months Ended
	Mar. 31, 2022 USD ($)
2022 [Member]
Promissory Notes-Related Parties (Details) - Schedule of amounts payable under the promissory notes [Line Items]
Debt Principal
Interest	225,127
2023 [Member]
Promissory Notes-Related Parties (Details) - Schedule of amounts payable under the promissory notes [Line Items]
Debt Principal	1,000,000
Interest
2024 [Member]
Promissory Notes-Related Parties (Details) - Schedule of amounts payable under the promissory notes [Line Items]
Debt Principal	6,750,000
Interest

Loan Payable Under Credit Agreement (Details) - USD ($)	1 Months Ended	3 Months Ended
Loan Payable Under Credit Agreement (Details) - USD ($)	Jan. 29, 2021	Mar. 31, 2022	Mar. 31, 2021	Mar. 08, 2022	Mar. 06, 2015
Loan Payable Under Credit Agreement (Details) [Line Items]
Lender fee	$ 237,000
Increased commitment amount				$ 82,500,000
Credity availability		$ 1,735,977
Outstanding balance under credit agreement			$ 36,790,000
Unamortized issuance costs		$ 450,679	499,661
Credit Agreement [Member]
Loan Payable Under Credit Agreement (Details) [Line Items]
Borrow from lender					$ 57,500,000
Description of credit facility	This Amendment extended the Commitment Termination Date to April 1, 2024, amended other covenant requirements, partially removed indebtedness covenants and amended eligibility rules.
Interest rate	11.00%
Bear interest rate		11.40%
Interest expense		$ 1,551,844	$ 1,125,239
Outstanding balance under credit agreement		$ 56,150,000

Loan Payable Under Credit Agreement (Details) - Schedule of covenant requirements, and flexshopper's actual results	3 Months Ended
	Mar. 31, 2022 USD ($) $ / shares
Required Covenant [Member]
Loan Payable Under Credit Agreement (Details) - Schedule of covenant requirements, and flexshopper's actual results [Line Items]
Equity Book Value not less than	$ 9,636,387
Liquidity greater than	1,500,000
Cash greater than	$ 500,000
Consolidated Total Debt to Equity Book Value ratio not to exceed (in Dollars per share) \| $ / shares	$ 5.25
Actual Position [Member]
Loan Payable Under Credit Agreement (Details) - Schedule of covenant requirements, and flexshopper's actual results [Line Items]
Equity Book Value not less than	$ 14,204,970
Liquidity greater than	4,319,701
Cash greater than	$ 4,319,701
Consolidated Total Debt to Equity Book Value ratio not to exceed (in Dollars per share) \| $ / shares	$ 4.48

Capital Structure (Details) - USD ($)	1 Months Ended		3 Months Ended
Capital Structure (Details) - USD ($)	Sep. 30, 2018	Jun. 30, 2016	Mar. 31, 2022	Mar. 31, 2021
Capital Structure (Details) [Line Items]
Warrant convertible into common stock			116,903
Preferred Stock [Member]
Capital Structure (Details) [Line Items]
Preferred stock, shares authorized			500,000
Preferred stock, par value (in Dollars per share)			$ 0.001
Common Stock [Member]
Capital Structure (Details) [Line Items]
Common stock price (in Dollars per share)			$ 23
Convertible preferred stock, terms of conversion, description			The Company is authorized to issue 40,000,000 shares of common stock, par value $0.0001 per share. Each share of common stock entitles the holder to one vote at all stockholder meetings.
Common stock, share authorized			40,000,000
Common stock par or stated per share value (in Dollars per share)			$ 0.0001
Series 1 Convertible Preferred Stock [Member]
Capital Structure (Details) [Line Items]
Preferred stock conversion basis, description			As of March 31, 2022, each share of Series 1 Convertible Preferred Stock was convertible into 1.32230 shares of the Company’s common stock, subject to certain anti-dilution rights.
Convertible preferred stock, terms of conversion, description			As of March 31, 2022, there were 170,332 shares of Series 1 Convertible Preferred Stock outstanding, which were convertible into 225,231 shares of common stock.
Series 1 Convertible Preferred Stock [Member] \| Preferred Stock [Member]
Capital Structure (Details) [Line Items]
Preferred stock, shares authorized			250,000
Series 2 Convertible Preferred Stock [Member]
Capital Structure (Details) [Line Items]
Preferred stock, designated			25,000
Convertible preferred stock, shares issued upon conversion			20,000
Proceeds from sale of stock (in Dollars)			$ 20,000,000
Additional sale of shares			1,952
Gross proceeds (in Dollars)			$ 1,950,000
Preferred shares sold per share (in Dollars per share)			$ 1,000
Stated value, percentage			10.00%
Cumulative accrued dividends (in Dollars)			$ 13,880,950
Preferred stock conversion into common stock, shares			266
Description of warrants expiration		In connection with the issuance of Series 2 Convertible Preferred Stock in June 2016, the Company issued to the placement agent in such offering warrants exercisable for 439 shares of Series 2 Convertible Preferred Stock at an initial exercise price of $1,250 per share, which expire seven years after the date of issuance.
Consulting Agreement [Member]
Capital Structure (Details) [Line Items]
Warrant exercise price (in Dollars per share)			$ 1.6
Warrants expiration period			4 years
Warrant [Member]
Capital Structure (Details) [Line Items]
Warrants exercisable for shares of common stock	5,750,000		1,055,184
Warrant exercise price (in Dollars per share)	$ 1.25		$ 1.25
Description of warrants expiration	The warrants were immediately exercisable and expire five years from the date of issuance.		The warrants are exercisable at $1.25 per share of common stock and expire on September 28, 2023.
Issuance of warrants			40,000
Valuation expenses (in Dollars)				$ 212,923
Weighted average grant date fair value (in Dollars per share)				$ 1.77
Warrant [Member] \| Consulting Agreement [Member]
Capital Structure (Details) [Line Items]
Warrant exercise price (in Dollars per share)			$ 1.25
Description of warrants expiration			The warrants are immediately exercisable and expire following the close of business on June 30, 2023.
Warrant, description			As part of a consulting agreement with XLR8 Capital Partners LLC (the “Consulting Agreement”), an entity of which the Company’s Chairman is manager, the Company agreed to issue 40,000 warrants to XLR8 Capital Partners LLC monthly for 12 months beginning on March 1, 2019 at an exercise price of $1.25 per share or, if the closing share price on the last day of the month exceeds $1.25, then such exercise price will be 110% of the closing share price.

Capital Structure (Details) - Schedule of weighted average valuation	3 Months Ended
	Mar. 31, 2022 USD ($) $ / shares shares
Capital Structure (Details) - Schedule of weighted average valuation [Line Items]
Warrants Granted \| shares	120,000
Expense Recorded \| $	$ 212,923
Grant date fair value Per Warrant \| $ / shares	$ 1.77
Warrant [Member] \| January 31, 2021 [Member]
Capital Structure (Details) - Schedule of weighted average valuation [Line Items]
Warrants Granted \| shares	40,000
Expense Recorded \| $	$ 73,595
Grant date fair value Per Warrant \| $ / shares	$ 1.84
Warrant [Member] \| February 29, 2021 [Member]
Capital Structure (Details) - Schedule of weighted average valuation [Line Items]
Warrants Granted \| shares	40,000
Expense Recorded \| $	$ 76,318
Grant date fair value Per Warrant \| $ / shares	$ 1.91
Warrant [Member] \| March 31, 2021 [Member]
Capital Structure (Details) - Schedule of weighted average valuation [Line Items]
Warrants Granted \| shares	40,000
Expense Recorded \| $	$ 63,010
Grant date fair value Per Warrant \| $ / shares	$ 1.58

Capital Structure (Details) - Schedule of outstanding stock warrants - Warrant [Member]

3 Months Ended

Mar. 31, 2022

$ / shares

Class of Warrant or Right [Line Items]

Common Stock Warrants Outstanding

2,255,184

Series 2 Preferred Stock Warrants Outstanding

439

Exercise Price 1.25 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.25

Common Stock Warrants Outstanding

1,055,184

Weighted Average Remaining Contractual Life

1 year

Exercise Price 1.25 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.25

Common Stock Warrants Outstanding

160,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 1.34 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.34

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 1.40 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.4

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 1.54 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.54

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 1.62 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.62

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 1.68 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.68

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

3 years

Exercise Price 1.69 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.69

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 1.74 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.74

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 1.76 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.76

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 1.91 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.91

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 1.95 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1.95

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

3 years

Exercise Price 2.00 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 2.01 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.01

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 2.08 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.08

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

3 years

Exercise Price 2.45 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.45

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 2.53 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.53

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 2.57 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.57

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

3 years

Exercise Price 2.70 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.7

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

4 years

Exercise Price 2.78 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.78

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 2.79 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.79

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

4 years

Exercise Price 2.89 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.89

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

4 years

Exercise Price 2.93 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.93

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

1 year

Exercise Price 2.97 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 2.97

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

4 years

Exercise Price 3.09 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 3.09

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

4 years

Exercise Price 3.17 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 3.17

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

4 years

Exercise Price 3.89 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 3.19

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

4 years

Exercise Price 3.27 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 3.27

Common Stock Warrants Outstanding

40,000

Weighted Average Remaining Contractual Life

4 years

Exercise Price 1,250 [Member]

Class of Warrant or Right [Line Items]

Exercise Price (in Dollars per share) | $ / shares

$ 1,250

Series 2 Preferred Stock Warrants Outstanding

439

^[1]

Weighted Average Remaining Contractual Life

1 year

[1]	At March 31, 2022, these warrants were convertible into 116,903 shares of common stock

Equity Compensation Plans (Details) - USD ($)	3 Months Ended
Equity Compensation Plans (Details) - USD ($)	Mar. 31, 2022	Mar. 31, 2021
Equity Compensation Plans (Details) [Line Items]
Compensation expense	$ 305,229	$ 380,263
Unrecognized compensation cost related to non-vested options	$ 802,271
Weighted average period	3 years 25 days
Weighted average grant fair value (in Dollars per share)	$ 0.92	$ 1.76
Issued ranges percentage		0.00%
2018 Plan [Member]
Equity Compensation Plans (Details) [Line Items]
Shares issued (in Shares)	720,000

Equity Compensation Plans (Details) - Schedule of stock-based compensation expense - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Schedule of stock-based compensation expense [Abstract]
Stock options	$ 291,283	$ 380,263
Performance share units	13,946
Total stock-based compensation	$ 305,229	$ 380,263

Equity Compensation Plans (Details) - Schedule of measured fair value of each option award grant using the black-scholes-merton (BSM) pricing model - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Equity Compensation Plans (Details) - Schedule of measured fair value of each option award grant using the black-scholes-merton (BSM) pricing model [Line Items]
Expected life	6 years	5 years
Expected volatility	66.70%	93.00%
Dividend yield	0.00%	0.00%
Minimum [Member]
Equity Compensation Plans (Details) - Schedule of measured fair value of each option award grant using the black-scholes-merton (BSM) pricing model [Line Items]
Exercise price (in Dollars per share)	$ 1.53	$ 2.38
Risk-free interest rate	1.80%	0.31%
Maximum [Member]
Equity Compensation Plans (Details) - Schedule of measured fair value of each option award grant using the black-scholes-merton (BSM) pricing model [Line Items]
Exercise price (in Dollars per share)	$ 1.71	$ 2.76
Risk-free interest rate	2.40%	0.93%

Equity Compensation Plans (Details) - Schedule of stock option - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Schedule of stock option [Abstract]
Number of options Outstanding beginning	3,080,904	2,595,700
Weighted average exercise price Outstanding beginning	$ 2.06	$ 1.92
Weighted average contractual term (years) Outstanding beginning
Aggregate intrinsic value Outstanding beginning	$ 1,923,642
Number of options Granted	951,944	543,397
Weighted average exercise price Granted	$ 1.54	$ 2.48
Aggregate intrinsic value Granted
Number of options Exercised	(162,956)	(16,000)
Weighted average exercise price Exercised	$ 0.84	$ 0.81
Aggregate intrinsic value Exercised	$ 204,030	$ 40,010
Number of options Forfeited	(7,333)	(4,667)
Weighted average exercise price Forfeited	$ 2.22	$ 0.82
Aggregate intrinsic value Forfeited	$ 2,273	$ 9,564
Number of options Expired	(25,000)
Weighted average exercise price Expired	$ 1.7
Number of options Outstanding ending	3,837,559	3,118,730
Weighted average exercise price Outstanding ending	$ 1.98	$ 2.03
Weighted average contractual term (years) Outstanding ending	7 years 4 months 2 days	7 years 4 months 20 days
Aggregate intrinsic value Outstanding ending	$ 925,306	$ 2,681,180
Number of options Vested and exercisable	2,508,822	1,819,541
Weighted average exercise price Vested and exercisable	$ 1.25	$ 1.95
Weighted average contractual term (years) Vested and exercisable	6 years 6 months 29 days	7 years 8 months 4 days
Aggregate intrinsic value Vested and exercisable	$ 731,891	$ 2,029,793

Equity Compensation Plans (Details) - Schedule of activity in performance share units	3 Months Ended
	Mar. 31, 2022 shares
Schedule of activity in performance share units [Abstract]
Number of performance share units, Granted	790,327
Weighted average grant date fair value, Granted	1 year 6 months 10 days
Number of performance share units, Forfeited/ unearned
Number of performance share units, Vested
Number of performance share units, Non- vested	790,327
Weighted average grant date fair value, Non- vested	1 year 6 months 10 days

Income Taxes (Details)	3 Months Ended
Income Taxes (Details)	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate	27.00%
Federal income tax rate	21.00%

Promissory Note- Paycheck Protection Program (Details) - USD ($)		1 Months Ended	3 Months Ended	12 Months Ended
	May 04, 2020	Jun. 21, 2021	Mar. 31, 2022	Dec. 31, 2021
Promissory Note- Paycheck Protection Program (Details) [Line Items]
Principal amount	$ 1,914,100
Maturity date, description			The Note matured on April 30, 2022 and bore interest at the rate of 1.00% per annum, payable monthly commencing on November 30, 2020, following an initial deferral period as specified under the PPP.
Promissory Notes [Member]
Promissory Note- Paycheck Protection Program (Details) [Line Items]
Promissory note issued		$ 1,914,000
Accrued interest				$ 1,931,825