0001213900-24-065631 | 10-Q | XBRL Viewer

Capital Structure (Tables)

6 Months Ended

Jun. 30, 2024

The following table summarizes information about outstanding stock warrants as of June 30, 2024 and December 31, 2023, all of which are exercisable:

Exercise		Common Stock Warrants		Weighted Average Remaining Contractual Life
Price		Outstanding		June 30, 2024	Dec 31, 2023
$	1.25		1,055,184	2 years	2 years
$	1.25		160,000	2 years	2 years
$	1.34		40,000	2 years	2 years
$	1.40		40,000	2 years	2 years
$	1.54		40,000	2 years	2 years
$	1.62		40,000	2 years	2 years
$	1.68		40,000	2 years	2 years
$	1.69		40,000	2 years	2 years
$	1.74		40,000	2 years	2 years
$	1.76		40,000	2 years	2 years
$	1.91		40,000	2 years	2 years
$	1.95		40,000	2 years	2 years
$	2.00		40,000	2 years	2 years
$	2.01		40,000	2 years	2 years
$	2.08		40,000	2 years	2 years
$	2.45		40,000	2 years	2 years
$	2.53		40,000	2 years	2 years
$	2.57		40,000	2 years	2 years
$	2.70		40,000	1 years	2 years
$	2.78		40,000	2 years	2 years
$	2.79		40,000	1 years	2 years
$	2.89		40,000	3 years	4 years
$	2.93		40,000	2 years	2 years
$	2.97		40,000	1 years	2 years
$	3.09		40,000	3 years	3 years
$	3.17		40,000	3 years	4 years
$	3.19		40,000	1 years	2 years
$	3.27		40,000	1 years	2 years
			2,255,184

Contingencies and Other Uncertainties	6 Months Ended
Jun. 30, 2024
Contingencies and Other Uncertainties [Abstract]
CONTINGENCIES AND OTHER UNCERTAINTIES	12. CONTINGENCIES AND OTHER UNCERTAINTIES Regulatory inquiries In the first quarter of 2021, FlexShopper, along with a number of other lease-to-own companies, received a subpoena from the California Department of Financial Protection and Innovation (the “DFPI”) requesting the production of documents and information regarding the Company’s compliance with state consumer protection laws. The Company is cooperatively engaging with the DFPI in response to its inquiry. Although the Company believes it is in compliance with all applicable consumer protection laws and regulations in California, this inquiry ultimately could lead to an enforcement action and/or a consent order, and substantial costs, including legal fees, fines, penalties, and remediation expenses. Litigation The Company is not involved in any current or pending material litigation. The Company could be involved in litigation incidental to the operation of the business. The Company intends to vigorously defend all matters in which the Company is named defendants, and, for insurable losses, maintain significant levels of insurance to protect against adverse judgments, claims or assessments that may affect the Company. Although the adequacy of existing insurance coverage of the outcome of any legal proceedings cannot be predicted with certainty, based on the current information available, the Company does not believe the ultimate liability associated with known claims or litigation, if any, in which the Company is involved will materially affect the Company’s consolidated financial condition or results of operations. Employment agreements Certain executive management entered into employment agreements with the Company. The contracts are for a period of three years and renew for three successive one-year terms unless receipt of written notices by the parties. The contracts provide that such management may earn discretionary cash bonuses and equity awards, based on financial performance metrics defined each year by the Compensation Committee of the Company’s Board of Directors. Additionally, under certain termination conditions, such contracts provide for severance payments and other benefits. COVID-19 and other similar health crisis The Company has been, and may in the future, be impacted by COVID-19 or any similar pandemic or health crisis, and this could affect our results of operations, financial condition, or cash flow in the future. The extent and the effects of the impact of any of these events on the operation and financial performance of our business depend on several factors which are highly uncertain and cannot be predicted.

Contingencies and Other Uncertainties

6 Months Ended

Jun. 30, 2024

Contingencies and Other Uncertainties [Abstract]

CONTINGENCIES AND OTHER UNCERTAINTIES

12. CONTINGENCIES AND OTHER UNCERTAINTIES

Regulatory inquiries

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

Litigation

The Company is not involved in any current or pending material litigation. The Company could be involved in litigation incidental to the operation of the business. The Company intends to vigorously defend all matters in which the Company is named defendants, and, for insurable losses, maintain significant levels of insurance to protect against adverse judgments, claims or assessments that may affect the Company. Although the adequacy of existing insurance coverage of the outcome of any legal proceedings cannot be predicted with certainty, based on the current information available, the Company does not believe the ultimate liability associated with known claims or litigation, if any, in which the Company is involved will materially affect the Company’s consolidated financial condition or results of operations.

Employment agreements

Certain executive management entered into employment agreements with the Company. The contracts are for a period of three years and renew for three successive one-year terms unless receipt of written notices by the parties. The contracts provide that such management may earn discretionary cash bonuses and equity awards, based on financial performance metrics defined each year by the Compensation Committee of the Company’s Board of Directors. Additionally, under certain termination conditions, such contracts provide for severance payments and other benefits.

COVID-19 and other similar health crisis

The Company has been, and may in the future, be impacted by COVID-19 or any similar pandemic or health crisis, and this could affect our results of operations, financial condition, or cash flow in the future. The extent and the effects of the impact of any of these events on the operation and financial performance of our business depend on several factors which are highly uncertain and cannot be predicted.

- 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.

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+ Details

Summary of Significant Accounting Policies (Details) - Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement

6 Months Ended

12 Months Ended

Jun. 30, 2024

Dec. 31, 2023

Minimum [Member]

Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement [Line Items]

Estimated losses

^[1]

0.00%

Servicing costs

Discount rate

Maximum [Member]

Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement [Line Items]

Estimated losses

^[1]

92.40%

92.50%

Servicing costs

Discount rate

Weighted Average [Member]

Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement [Line Items]

Estimated losses

^[1]

21.40%

^[2]

28.90%

Servicing costs

4.40%

^[2]

4.70%

Discount rate

20.50%

^[2]

20.10%

[1]	Figure disclosed as a percentage of outstanding principal balance.
[2]	Unobservable inputs were weighted by outstanding principal balance, which are grouped by origination channel.

Business	6 Months Ended
Jun. 30, 2024
Business [Abstract]
BUSINESS	2. BUSINESS FlexShopper, Inc. (the “Company”) is a corporation organized under the laws of the State of Delaware in 2006. The Company owns 100% of FlexShopper, LLC, a North Carolina limited liability company, owns 100% of FlexLending, LLC, a Delaware limited liability company, and owns 100% of Flex Revolution, LLC, a Delaware limited liability company. The Company is a holding corporation with no operations except for those conducted by its subsidiaries FlexShopper, LLC, FlexLending, LLC and Flex Revolution, LLC. In January 2015, in connection with the Credit Agreement entered in March 2015 (see Note 8), FlexShopper 1 LLC and FlexShopper 2 LLC were organized as wholly owned Delaware subsidiaries of FlexShopper LLC to conduct operations. FlexShopper Inc, together with its subsidiaries, are hereafter referred to as “FlexShopper.” FlexShopper, LLC provides durable goods to consumers on a lease-to-own basis (“LTO”). After receiving a signed consumer lease, the Company then funds the leased item by purchasing the item from the Company’s merchant partner and leasing it to the consumer. FlexShopper, LLC also sells products to other lenders that offer finance options in FlexShopper’s website. FlexLending, LLC participates in a consumer finance program offered by a third-party bank partner. The third-party originates unsecured consumer loans through strategic sales channels. Under this program, FlexLending, LLC purchases a participation interest in each of the loans originated by the third-party. Flex Revolution, LLC operates a direct origination model for consumers in 11 states. In the direct origination model, applicants who apply and obtain a loan through our platform are underwritten, approved, and funded directly by the Company.

Business

6 Months Ended

Jun. 30, 2024

Business [Abstract]

BUSINESS

2. BUSINESS

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

In January 2015, in connection with the Credit Agreement entered in March 2015 (see Note 8), FlexShopper 1 LLC and FlexShopper 2 LLC were organized as wholly owned Delaware subsidiaries of FlexShopper LLC to conduct operations. FlexShopper Inc, together with its subsidiaries, are hereafter referred to as “FlexShopper.”

FlexShopper, LLC provides durable goods to consumers on a lease-to-own basis (“LTO”). After receiving a signed consumer lease, the Company then funds the leased item by purchasing the item from the Company’s merchant partner and leasing it to the consumer. FlexShopper, LLC also sells products to other lenders that offer finance options in FlexShopper’s website.

FlexLending, LLC participates in a consumer finance program offered by a third-party bank partner. The third-party originates unsecured consumer loans through strategic sales channels. Under this program, FlexLending, LLC purchases a participation interest in each of the loans originated by the third-party.

Flex Revolution, LLC operates a direct origination model for consumers in 11 states. In the direct origination model, applicants who apply and obtain a loan through our platform are underwritten, approved, and funded directly by the Company.

Share Repurchase Program (Details) - USD ($)	6 Months Ended
Share Repurchase Program (Details) - USD ($)	Jun. 30, 2024	May 17, 2023
Share Repurchase Program [Line Items]
Share repurchase		$ 2,000,000
Common Stock [Member]
Share Repurchase Program [Line Items]
Share repurchase program (in Shares)	182,229
Net cost	$ 200,806

- Definition

Number of shares that have been repurchased during the period and have not been retired and are not held in treasury. Some state laws may govern the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock.

+ References + Details

- Definition

Equity impact of the value of stock that has been repurchased during the period and has not been retired and is not held in treasury. Some state laws may mandate the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock.

+ References + Details

Loan Payable Under Credit Agreement (Tables)

6 Months Ended

Jun. 30, 2024

Loan Payable Under Credit Agreement [Abstract]

Schedule of Covenant Requirements and FlexShopper's Actual Results

A summary of the covenant requirements, and FlexShopper’s actual results at June 30, 2024, follows:

	June 30, 2024
	Required Covenant		Actual Position
Equity Book Value not less than	$	16,452,246	$	27,481,239
Liquidity greater than		3,500,000		10,346,383
Cash greater than		2,500,000		4,892,912
Consolidated Total Debt to Equity Book Value ratio not to exceed		5.25		4.72

Leases (Details) - Schedule of Supplemental Balance Sheet Information Related to Leases - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Supplemental Balance Sheet Information Related to Leases [Abstract]
Operating Lease Asset	$ 1,142,104	$ 1,233,538
Finance Lease Asset		3,472
Total Lease Assets	1,142,104	1,237,010
Operating Lease Liability – current portion	263,104	240,444
Finance Lease Liability – current portion	7	4,608
Operating Lease Liability – net of current portion	1,184,683	1,321,578
Total Lease Liabilities	$ 1,447,794	$ 1,566,630

Pay vs Performance Disclosure - USD ($)	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($)	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (1,603,059)	$ (214,179)	$ (5,297,655)	$ (230,215)	$ (1,817,238)	$ (5,527,870)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Reference 36: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482790/220-10-45-1B

Reference 37: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478524/942-220-S99-1

+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Summary of Significant Accounting Policies (Details) - Schedule of Lease Receivables Balances - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Accounts Receivable [Abstract]
Lease receivables	$ 90,159,481	$ 64,749,918
Allowance for doubtful accounts	(33,008,354)	(19,954,828)
Lease receivables, net	$ 57,151,127	$ 44,795,090

Summary of Significant Accounting Policies (Details) - Schedule of Computation of Basic and Diluted Earnings Per Common Share - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator
Net loss	$ (1,603,059)	$ (214,179)	$ (5,297,655)	$ (230,215)	$ (1,817,238)	$ (5,527,870)
Series 2 Convertible Preferred Stock dividends	(1,091,742)		(992,493)		(2,161,198)	(1,964,726)
Net loss attributable to common and Series 1 Convertible Preferred Stock	(2,694,801)		(6,290,148)		(3,978,436)	(7,492,596)
Net income attributable to Series 1 Convertible Preferred Stock
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock
Net loss attributable to common shares- Numerator for basic EPS	(2,694,801)		(6,290,148)		(3,978,436)	(7,492,596)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends
Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS	$ (2,694,801)		$ (6,290,148)		$ (3,978,436)	$ (7,492,596)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS (in Shares)	21,469,720		21,752,304		21,527,869	21,751,807
Effect of dilutive securities:
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS (in Shares)	21,469,720		21,752,304		21,527,869	21,751,807
Basic EPS (in Dollars per share)	$ (0.13)		$ (0.29)		$ (0.18)	$ (0.34)
Diluted EPS (in Dollars per share)	$ (0.13)		$ (0.29)		$ (0.18)	$ (0.34)
Series 2 Convertible Preferred Stock [Member]
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends
Effect of dilutive securities:
Effect of dilutive securities
Series 1 Convertible Preferred Stock [Member]
Effect of dilutive securities:
Effect of dilutive securities
Common stock options and performance share units [Member]
Effect of dilutive securities:
Effect of dilutive securities
Common stock warrants [Member]
Effect of dilutive securities:
Effect of dilutive securities

Basis of Presentation

6 Months Ended

Jun. 30, 2024

Basis of Presentation [Abstract]

BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

The unaudited condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and in conformity with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim financial information. Accordingly, the information presented in the interim financial statements does not include all information and disclosures necessary for a fair presentation of FlexShopper, Inc.’s financial position, results of operations and cash flows in conformity with GAAP for annual financial statements. In the opinion of management, these financial statements reflect all adjustments consisting of normal recurring accruals, necessary for a fair statement of our financial position, results of operations and cash flows for such periods. The results of operations for any interim period are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto contained in FlexShopper, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on April 1, 2024.

The condensed consolidated balance sheet as of December 31, 2023 contained herein has been derived from audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

Certain prior year/period amounts have been reclassified to conform to the current year presentation.

Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2024

Intangible Assets [Abstract]

Schedule of Intangible Assets

The following table provides a summary of our intangible assets:

	June 30, 2024
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patent	10 years	$	30,760	$	(30,760	)	$	-
Franchisee contract-based agreements	10 years		12,744,367		(2,017,840	)		10,726,527
Liberty Loan brand	10 years		340,218		(53,823	)		286,395
Non-compete agreements	10 years		86,113		(13,752	)		72,361
Non contractual customer relationships	5 years		1,952,371		(618,396	)		1,333,975
Customer list	3 years		184,825		(97,538	)		87,287
		$	15,338,654	$	(2,832,109	)	$	12,506,545

	December 31, 2023
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patent	10 years	$	30,760	$	(30,760	)	$	-
Franchisee contract-based agreements	10 years		12,744,367		(1,380,638	)		11,363,729
Liberty Loan brand	10 years		340,218		(36,855	)		303,363
Non-compete agreements	10 years		86,113		(9,334	)		76,779
Non contractual customer relationships	5 years		1,952,371		(423,020	)		1,529,351
Customer list	3 years		184,825		(66,742	)		118,083
		$	15,338,654	$	(1,947,349	)	$	13,391,305

Schedule of Future Estimated Amortization Expense

As of June 30, 2024, future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following table:

	Amortization Expense
2024 (six months remaining)		884,580
2025		1,764,026
2026		1,707,552
2027		1,675,012
2028		1,317,072
Total	$	7,348,242

Summary of Significant Accounting Policies (Details) - Schedule of Concerning Loan Receivables at Fair Value - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Concerning Loan Receivables at Fair Value [Abstract]
Aggregate fair value of loan receivables that are 90 days or more past due	$ 33,104,613	$ 27,828,083
Unpaid principal balance of loan receivables that are 90 days or more past due	42,613,754	41,208,009
Aggregate fair value of loan receivables in non-accrual status	$ 33,119,327	$ 27,764,926

Summary of Significant Accounting Policies (Details) - Schedule of Net Lease Merchandise Balances - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Net Leased Merchandise [Abstract]
Lease merchandise at cost	$ 48,811,580	$ 49,687,498
Accumulated depreciation and impairment reserve	(22,955,038)	(20,556,058)
Lease merchandise, net	$ 25,856,542	$ 29,131,440

Employee Benefit Plan (Details) - USD ($)	3 Months Ended		6 Months Ended
Employee Benefit Plan (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Employee Benefit Plan [Abstract]
Nondiscretionary, percentage			4.00%
Total contribution	$ 48,109	$ 36,601	$ 97,816	$ 86,762

Revolution Transaction (Details) - USD ($)	6 Months Ended	12 Months Ended
Revolution Transaction (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Revolution Transaction [Line Items]
Consideration transferred	$ 3,421,991
Bargain price	14,461,274
Fair value of promissory note		$ 3,678,689
Seller Note [Member]
Revolution Transaction [Line Items]
Initial principal amount	$ 5,000,000
Maturity date	Dec. 01, 2027
Interest per annum	8.00%

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2024	Aug. 06, 2024
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Amendment Flag	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Entity Information [Line Items]
Entity Registrant Name	FLEXSHOPPER, INC.
Entity Central Index Key	0001397047
Entity File Number	001-37945
Entity Tax Identification Number	20-5456087
Entity Incorporation, State or Country Code	DE
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Contact Personnel [Line Items]
Entity Address, Address Line One	901 Yamato Road
Entity Address, Address Line Two	Suite 260
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33431
Entity Phone Fax Numbers [Line Items]
City Area Code	(855)
Local Phone Number	353-9289
Entity Listings [Line Items]
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	FPAY
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		21,619,954

Equity Compensation Plans (Details) - Schedule of Weighted Average of Stock Options Granted	6 Months Ended
	Jun. 30, 2023 $ / shares
Schedule of Weighted Average of Stock Options Granted [Abstract]
Exercise price (in Dollars per share)	$ 0.79
Expected life	6 years
Expected volatility	96.00%
Dividend yield	0.00%
Risk-free interest rate	3.54%

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues:
Total revenues	$ 31,758,885	$ 24,532,036	$ 65,703,758	$ 55,317,811
Costs and expenses:
Depreciation and impairment of lease merchandise	13,848,925	14,485,417	28,534,788	29,831,205
Loan origination costs and fees	896,040	1,655,424	1,717,867	3,489,051
Cost of retail revenues	1,059,098		1,670,302
Marketing	2,545,814	1,488,578	4,311,386	2,587,767
Salaries and benefits	4,224,614	2,976,008	8,308,533	5,702,898
Operating expenses	6,807,328	5,957,932	13,739,834	11,585,640
Total costs and expenses	29,381,819	26,563,359	58,282,710	53,196,561
Operating income/ (loss)	2,377,066	(2,031,323)	7,421,048	2,121,250
Interest expense including amortization of debt issuance costs	(5,226,155)	(4,568,557)	(10,541,249)	(9,099,884)
Loss before income taxes	(2,849,089)	(6,599,880)	(3,120,201)	(6,978,634)
Benefit from income taxes	1,246,030	1,302,225	1,302,963	1,450,764
Net loss	(1,603,059)	(5,297,655)	(1,817,238)	(5,527,870)
Dividends on Series 2 Convertible Preferred Shares	(1,091,742)	(992,493)	(2,161,198)	(1,964,726)
Net loss attributable to common and Series 1 Convertible Preferred shareholders	$ (2,694,801)	$ (6,290,148)	$ (3,978,436)	$ (7,492,596)
Basic and diluted loss per common share:
Basic (in Dollars per share)	$ (0.13)	$ (0.29)	$ (0.18)	$ (0.34)
Diluted (in Dollars per share)	$ (0.13)	$ (0.29)	$ (0.18)	$ (0.34)
WEIGHTED AVERAGE COMMON SHARES:
Basic (in Shares)	21,469,720	21,752,304	21,527,869	21,751,807
Diluted (in Shares)	21,469,720	21,752,304	21,527,869	21,751,807
Lease revenues and fees, net
Revenues:
Revenue from Contract with Customer	$ 27,074,048	$ 22,906,843	$ 52,907,784	$ 47,621,001
Loan revenues and fees, net of changes in fair value
Revenues:
Revenue from Contract with Customer	3,314,375	1,625,193	10,645,652	7,696,810
Retail revenues
Revenues:
Revenue from Contract with Customer	$ 1,370,462		$ 2,150,322

Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

LEASES

4. LEASES

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

Lease Commitments

In January 2019, FlexShopper entered into a 108-month lease with an option for one additional five-year term for 21,622 square feet of office space in Boca Raton, FL to accommodate FlexShopper’s business and its employees. The monthly rent for this space is approximately $31,500 with annual three percent increases throughout the initial 108-month lease term beginning on the anniversary of the commencement date, which was September 18, 2019.

In September 2021, FlexShopper entered into a 12-month lease for an office space for approximately 18 people at the Battery at SunTrust Park at Georgia, Atlanta mainly to expand the sales team. This lease was renewed for another twelve-month period with a monthly rent of approximately $8,800. This lease is accounted for under the practical expedient for leases with initial terms for 12 months or less, and as such no related right of use asset or liability was recorded.

As part of the Revolution Transaction (See Note 14), 22 storefront lease agreements were acquired by FlexShopper. Some of those stores were closed or transferred to franchisees after the Revolution Transaction. As of June 30, 2024, 34 storefront lease agreements belong to FlexShopper. The stores are located in Alabama, Idaho, Michigan, Mississippi, Nevada, and Oklahoma and are used to offer finance products to customers. The monthly average rent for these stores is approximately $1,800 per month. These leases are accounted for under the practical expedient for leases with initial terms for 12 months or less, and as such no related right of use asset or liability was recorded.

The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are included in the Company’s condensed consolidated balance sheets within the Right of use asset, net, Lease liability- current portion and Lease liabilities, net of current portion.

Supplemental balance sheet information related to leases is as follows:

	Balance Sheet Classification	June 30, 2024		December 31, 2023
Assets
Operating Lease Asset	Right of use asset, net	$	1,142,104	$	1,233,538
Finance Lease Asset	Right of use asset, net		-		3,472
Total Lease Assets		$	1,142,104	$	1,237,010

Liabilities
Operating Lease Liability – current portion	Current Lease Liabilities	$	263,104	$	240,444
Finance Lease Liability – current portion	Current Lease Liabilities		7		4,608
Operating Lease Liability – net of current portion	Long Term Lease Liabilities		1,184,683		1,321,578
Total Lease Liabilities		$	1,447,794	$	1,566,630

Operating lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company uses its incremental borrowing rate as the discount rate for its leases, as the implicit rate in the lease is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. Operating lease assets also include any prepaid lease payments and lease incentives. The lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company generally uses the base, non-cancelable, lease term when determining the lease assets and liabilities. Under the short-term lease exception provided within ASC 842, the Company does not record a lease liability or right-of-use asset for any leases that have a lease term of 12 months or less at commencement.

Below is a summary of the weighted-average discount rate and weighted-average remaining lease term for the Company’s leases:

	Weighted Average Discount Rate			Weighted Average Remaining Lease Term (in years)
Operating Leases		13.03	%		4
Finance Leases		13.39	%		-

Operating lease expense is recognized on a straight-line basis over the lease term within operating expenses in the Company’s condensed consolidated statements of operations. Finance lease expense is recognized over the lease term within interest expense and amortization in the Company’s condensed consolidated statements of operations. The Company’s total operating and finance lease expense all relate to lease costs amounted to $98,993 and $198,097 for the three and six months ended June 30, 2024, respectively, and $97,367 and $194,623 for the three and six months ended June 30, 2023, respectively.

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

	Six Months ended
	June 30,
	2024		2023
Cash payments for operating leases	$	212,938	$	206,736
Cash payments for finance leases		4,782		4,782

Below is a summary of undiscounted operating lease liabilities as of June 30, 2024. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the operating lease liabilities included in the condensed consolidated balance sheet.

	Operating Leases
2024		217,197
2025		443,038
2026		456,330
2027		470,019
2028 and thereafter		303,574
Total undiscounted cash flows		1,890,158
Less: interest		(442,371	)
Present value of lease liabilities	$	1,447,787

Below is a summary of undiscounted finance lease liabilities as of June 30, 2024. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance lease liabilities included in the condensed consolidated balance sheet.

	Finance Leases
2024		7
Total undiscounted cash flows		7
Less: interest		-
Present value of lease liabilities	$	7

Contingencies and Other Uncertainties (Details)	6 Months Ended
Contingencies and Other Uncertainties (Details)	Jun. 30, 2024
Contingencies and Other Uncertainties [Abstract]
Contracts period	3 years

Share Repurchase Program

6 Months Ended

Jun. 30, 2024

Share Repurchase Program [Abstract]

SHARE REPURCHASE PROGRAM

17. SHARE REPURCHASE PROGRAM

On May 17, 2023, the Board of Directors authorized a share repurchase program to acquire up to $2 million of the Company’s common stock. The Company may purchase common stock on the open market, through privately negotiated transactions, or by other means including through the use of trading plans intended to qualify under Rule 10b-18 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The share repurchase program will have a term of 18 months and may be suspended or discontinued at any time and does not obligate the company to acquire any amount of common stock.

The Company purchased under the share repurchase program 182,229 shares of common stock for a net cost of $200,806 for the six months ended June 30, 2024.

Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2024

Property and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consist of the following:

	Estimated Useful Lives	June 30, 2024			December 31, 2023
Furniture, fixtures and vehicle	2-5 years	$	395,867		$	395,868
Website and internal use software	3 years		28,291,589			25,786,321
Computers and software	3-7 years		5,465,155			4,763,115
			34,152,611			30,945,304
Less: accumulated depreciation and amortization			(24,733,506	)		(21,636,445	)
		$	9,419,105		$	9,308,859

Summary of Significant Accounting Policies (Details) - Schedule of Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation - Level 3 [Member] - USD ($)

6 Months Ended

12 Months Ended

Jun. 30, 2024

Dec. 31, 2023

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

Beginning balance

$ 35,794,290

$ 32,932,504

Purchases of loan participation

1,058,998

389,949

Obligation of loan participation

(12,931)

Loan originations

26,200,446

57,554,746

Interest and fees

^[1]

5,746,776

14,801,188

Collections

(32,554,732)

(80,089,020)

Net charge off

^[1]

(2,411,225)

(11,041,155)

Net change in fair value

^[1]

6,251,103

21,259,009

Ending balance

$ 40,085,656

$ 35,794,290

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

Property and Equipment (Details) - Schedule of Property and Equipment - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Property and Equipment [Line Items]
Property and equipment, gross	$ 34,152,611	$ 30,945,304
Less: accumulated depreciation and amortization	(24,733,506)	(21,636,445)
Property and equipment, net	9,419,105	9,308,859
Furniture, fixtures and vehicle [Member]
Schedule of Property and Equipment [Line Items]
Property and equipment, gross	$ 395,867	395,868
Website and internal use software [Member]
Schedule of Property and Equipment [Line Items]
Estimated useful Lives	3 years
Property and equipment, gross	$ 28,291,589	25,786,321
Computers and software [Member]
Schedule of Property and Equipment [Line Items]
Property and equipment, gross	$ 5,465,155	$ 4,763,115
Minimum [Member] \| Furniture, fixtures and vehicle [Member]
Schedule of Property and Equipment [Line Items]
Estimated useful Lives	2 years
Minimum [Member] \| Computers and software [Member]
Schedule of Property and Equipment [Line Items]
Estimated useful Lives	3 years
Maximum [Member] \| Furniture, fixtures and vehicle [Member]
Schedule of Property and Equipment [Line Items]
Estimated useful Lives	5 years
Maximum [Member] \| Computers and software [Member]
Schedule of Property and Equipment [Line Items]
Estimated useful Lives	7 years

Equity Compensation Plans (Tables)

6 Months Ended

Jun. 30, 2024

Equity Compensation Plans [Abstract]

Schedule of Stock-Based Compensation Expense

Stock-based compensation expense included the following components:

	Three Months ended June 30,				Six Months ended June 30,
	2024		2023		2024		2023
Stock options	$	80,463	$	384,396	$	160,907	$	805,144
Performance share units		74,410		59,404		211,091		59,404
Total stock-based compensation	$	154,873	$	443,800	$	371,998	$	864,548

Schedule of Weighted Average of Stock Options Granted

The weighted average assumptions used for the stock options granted during the six months ended June 30, 2023 were as follows:

	Six Months ended June 30, 2023
Exercise price	$	0.79
Expected life		6 years
Expected volatility		96	%
Dividend yield		0	%
Risk-free interest rate		3.54	%

Schedule of Activity in Stock Option

Activity in stock options for the six month periods ended June 30, 2024 and June 30, 2023 was as follows:

	Number of options			Weighted average exercise price		Weighted average contractual term (years)		Aggregate intrinsic value
Outstanding at January 1, 2024		4,452,447		$	1.57			$	2,152,602
Granted		-
Exercised/Released		-
Expired		(55,000	)		8.00				-
Outstanding at June 30, 2024		4,397,447		$	1.49		6.93	$	1,118,281
Vested and exercisable at June 30, 2024		3,661,778		$	1.56		6.71	$	855,491

Outstanding at January 1, 2023		3,919,228		$	1.97			$	52,223
Granted		1,517,844			0.79				75
Exercised		(1,500	)		0.79				345
Outstanding at June 30, 2023		5,435,572		$	1.64		7.27	$	1,102,624
Vested and exercisable at June 30, 2023		4,049,004		$	1.84		6.66	$	580,962

Schedule of Activity in Performance Share Units

Activity in performance share units for the six months ended June 30, 2024 and June 30, 2023 was as follows:

	Number of performance share units			Weighted average grant date fair value
Non- vested at January 1, 2024		1,250,000		$	0.78
Exercised/Released		(312,501	)		0.78
Non- vested at June 30, 2024		937,499		$	0.78
Non- vested at January 1, 2023		790,327		$	1.53
Granted		1,250,000			0.78
Forfeited/ unearned		(790,327	)		1.53
Non- vested at June 30, 2023		1,250,000		$	0.78

Summary of Significant Accounting Policies (Details) - Schedule of Lease Receivables Balances Charged Off Against the Allowance - Lease Receivables [Member] - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2024	Dec. 31, 2023
Summary of Significant Accounting Policies (Details) - Schedule of Lease Receivables Balances Charged Off Against the Allowance [Line Items]
Beginning balance	$ 19,954,828	$ 19,954,828	$ 13,078,800
Provision	17,290,476		42,505,647
Accounts written off	(4,236,950)		(35,629,619)
Ending balance	$ 33,008,354	$ 33,008,354	$ 19,954,828

Leases (Details) - Schedule of Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term	Jun. 30, 2024
Schedule of Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term [Abstract]
Operating Leases, Weighted Average Discount Rate	13.03%
Operating Leases, Weighted Average Remaining Lease Term (in years)	4 years
Finance Leases, Weighted Average Discount Rate	13.39%
Finance Leases, Weighted Average Remaining Lease Term (in years)

Promissory Notes-Related Parties

6 Months Ended

Jun. 30, 2024

Promissory Notes-Related Parties [Abstract]

PROMISSORY NOTES-RELATED PARTIES

7. PROMISSORY NOTES-RELATED PARTIES

122 Partners Note- On January 25, 2019, FlexShopper, LLC (the “Promissory Note Borrower”) entered into a subordinated debt financing letter agreement with 122 Partners, LLC, as lender, pursuant to which the Promissory Note Borrower 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 Executive Officer, is a member of 122 Partners, LLC. On March 30, 2023, the Promissory Note Borrower executed a fourth amendment to the 122 Partners Note such that the maturity date of the 122 Partners Note was extended from April 1, 2023 to October 1, 2023. On September 6, 2023, the Promissory Note Borrower paid all the principal and interest outstanding as of that date.

Interest paid for the 122 Partner Note was $53,346 and $105,988 for the three and six months ended June 30, 2023, respectively.

Interest expensed for the 122 Partner Note $53,346 and $105,022 for the three and six months ended June 30, 2023, respectively.

NRNS Note- FlexShopper LLC (the “Promissory Note 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 Promissory Note 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 Promissory Note Borrower on June 30, 2021 and the Promissory Note Borrower can prepay principal and interest at any time without penalty. At June 30, 2024, amounts outstanding under the NRNS Note bear interest at a rate of 19.44%. 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 Promissory Note Borrower may be required to repay all amounts outstanding under the NRNS Note. Obligations under the NRNS Note are secured by substantially all of the Promissory Note Borrower’s assets, subject to rights of the lenders under the Credit Agreement. On March 22, 2021, the Promissory Note Borrower executed an amendment to the NRNS Note such that the maturity date was extended to April 1, 2022. On February 2, 2022, the Promissory Note Borrower 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.

On June 29, 2023, the Company, the Promissory Note Borrower, NRNS, Mr. Heiser and PITA Holdings, LLC (“PITA”) entered into an Amendment to Subordinated Debt and Warrants to Purchase Common Stock (the “Amendment”), pursuant to which, among other things, the parties agreed to extend the maturity date of the NRNS Note from July 1, 2024 to July 1, 2025. In order to induce NRNS to enter into the Amendment, the Company extended the expiration date of certain warrants (See Note 9). The cost of the warrant modification was $917,581 and was recorded as a deferred debt cost of NRNS note. No other changes were made to such NRNS Note.

Interest paid for the NRNS Note was $547,717 and $1,130,537 for the three and six months ended June 30, 2024, respectively, and $573,466 and $1,139,375 for the three and six months ended June 30, 2023, respectively.

Interest expensed for the NRNS Note was $523,415 and $1,106,010 for the three and six months ended June 30, 2024, respectively, and $573,466 and $1,128,987 for the three and six months ended June 30, 2023, respectively.

Amounts payable under the promissory notes are as follows:

	Debt Principal		Interest
2024	$	-	$	174,096
2025	$	10,750,000	$	-

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,817,238)	$ (5,527,870)
Adjustments to reconcile net loss to net cash (used in)/ provided by operating activities:
Depreciation and impairment of lease merchandise	28,534,788	29,831,205
Other depreciation and amortization	4,698,213	3,710,703
Amortization of debt issuance costs	509,797	182,174
Amortization of discount on the promissory note related to acquisition		118,476
Compensation expense related to stock-based compensation	371,998	864,548
Provision for doubtful accounts	17,290,476	22,085,828
Deferred income tax	(1,302,963)	(1,457,740)
Net changes in the fair value of loans receivables at fair value	(4,898,876)	837,048
Changes in operating assets and liabilities:
Lease receivables	(29,646,513)	(25,773,184)
Loans receivables at fair value	607,510	6,990,410
Prepaid expenses and other assets	(1,208,258)	412,391
Lease merchandise	(25,259,890)	(22,878,600)
Purchase consideration payable related to acquisition		208,921
Lease liabilities	(19,329)	(12,243)
Accounts payable	(3,328,538)	(2,506,724)
Accrued payroll and related taxes	(196,268)	(11,079)
Accrued expenses	(233,202)	(1,603,202)
Net cash (used in)/ provided by operating activities	(15,898,293)	5,471,062
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment, including capitalized software costs	(3,207,307)	(3,114,534)
Purchases of data costs	(944,313)	(343,428)
Net cash used in investing activities	(4,151,620)	(3,457,962)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loan payable under credit agreement	22,361,690	2,750,000
Repayment of loan payable under credit agreement		(2,795,000)
Repayment of loan payable under Basepoint credit agreement		(1,500,000)
Debt issuance related costs	(1,523,100)	(115,403)
Proceeds from exercise of stock options		1,185
Principal payment under finance lease obligation	(4,601)	(4,917)
Repayment of purchase consideration payable related to acquisition		(143,330)
Tax payments associated with equity-based compensation transactions	(103,488)
Purchase of treasury stock	(200,806)
Net cash provided by/ (used in) financing activities	20,529,695	(1,807,465)
INCREASE IN CASH	479,782	205,635
CASH, beginning of period	4,413,130	6,173,349
CASH, end of period	4,892,912	6,378,984
Supplemental cash flow information:
Interest paid	9,414,926	8,453,511
Noncash investing and financing activities
Due date extension of warrants		$ 917,581

Income Taxes (Details)	3 Months Ended	6 Months Ended
Income Taxes (Details)	Jun. 30, 2024	Jun. 30, 2024
Income Taxes [Abstract]
Income tax rate, percentage	41.76%	21.00%

Business (Details)	Jun. 30, 2024
FlexShopper, LLC [Member]
Business [Line Items]
Investment percentage	100.00%
FlexLending, LLC [Member]
Business [Line Items]
Investment percentage	100.00%
Flex Revolution, LLC [Member]
Business [Line Items]
Investment percentage	100.00%

Accounting Policies, by Policy (Policies)

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

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

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 periods. Actual results could differ from those estimates.

Segment Information

Segment Information - Operating segments are defined as components of an enterprise about which separate financial information is available between which resources are allocated by the chief operating decision maker. The Company’s chief operating decision maker is the Chief Executive Officer. The Company has one operating and reportable segment that includes all the Company’s financial services, which is consistent with the current organizational structure.

Cash and Cash Equivalents

Cash and Cash Equivalents – The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains cash and cash equivalents with high-quality financial institutions, which at times exceed the Federal Deposit Insurance Corporation insurance limits. While the Company monitors daily the cash balances in its operating accounts and adjusts the balances as appropriate, these balances could be impacted if one or more of the financial institutions with which the Company deposits fails or is subject to other adverse conditions in the financial or credit markets. To date, the Company has experienced no loss or lack of access to its invested cash or cash equivalents; however, no assurance can be provided that access to invested cash and cash equivalents will not be impacted by adverse conditions in the financial and credit markets. As of June 30, 2024 and December 31, 2023, the Company had no cash equivalents.

Lease Revenue Recognition

Lease 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. 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.

Retail Revenue Recognition

Retail Revenue Recognition – The Company sells products directly to other lenders that offer alternative solutions on FlexShopper’s website and make a profit on the product margin. The Company accounts for the Retail Revenue under ASC 606. The Company has a single performance obligation that is the delivery of the product, at which point control transfers. Revenue for the sale of products is recognized at the time of delivery.

Lease Receivables and Allowance for Doubtful Accounts

Lease Receivables 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. Lease receivables 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 lease receivables balances consisted of the following as of June 30, 2024 and December 31, 2023:

	June 30, 2024			December 31, 2023

Lease receivables	$	90,159,481		$	64,749,918
Allowance for doubtful accounts		(33,008,354	)		(19,954,828	)
Lease receivables, net	$	57,151,127		$	44,795,090

FlexShopper does not charge off any customer account until it has exhausted all collection efforts with respect to each account, including attempts to repossess items. Lease receivables balances charged off against the allowance were $2,230,263 and $4,236,950 for the three and six months ended June 30, 2024, respectively, and $13,757,036 and $32,728,807 for the three and six months ended June 30, 2023, respectively.

	Six Months Ended June 30, 2024			Year Ended December 31, 2023
Beginning balance	$	19,954,828		$	13,078,800
Provision		17,290,476			42,505,647
Accounts written off		(4,236,950	)		(35,629,619	)
Ending balance	$	33,008,354		$	19,954,828

Lease Merchandise, net

Lease Merchandise, net - 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 Company reflects the undepreciated portion of the lease merchandise as depreciation expense and the related cost and accumulated depreciation are removed from lease merchandise. For lease merchandise 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 depreciation and impairment of lease merchandise. The cost, accumulated depreciation and impairment reserve related to such merchandise are written off upon determination that no salvage value is obtainable.

The net lease merchandise balances consisted of the following as of June 30, 2024 and December 31, 2023:

	June 30, 2024			December 31, 2023
Lease merchandise at cost	$	48,811,580		$	49,687,498
Accumulated depreciation and impairment reserve		(22,955,038	)		(20,556,058	)
Lease merchandise, net	$	25,856,542		$	29,131,440

Loan receivables at fair value

Loan receivables at fair value – The Company elected the fair value option on its entire loan and loan participation receivables portfolio. As such, loan receivables are carried at fair value in the consolidated balance sheets with changes in fair value recorded in the consolidated statements of operations. Accrued and unpaid interest and fees are included in loan receivables at fair value in the consolidated balance sheets. Management believes the reporting of these receivables at fair value method closely approximates the true economics of the loan.

Interest and fees are discontinued when loan receivables become contractually 90 or more days past due. The Company charges-off loans at the earlier of when the loans are determined to be uncollectible or when the loans are 90 days contractually past due. Recoveries on loan receivables that were previously charged off are recognized when cash is received. Changes in the fair value of loan receivables include the impact of current period charge offs associated with these receivables.

The Company estimates the fair value of the loan receivables using a discounted cash flow analysis at an individual loan level to more accurately predict future payments. The Company adjusts expected cash flows for estimated losses and servicing costs over the estimated duration of the underlying assets. These adjustments are determined using historical data and include appropriate consideration of recent trends and anticipated future performance. Future cash flows are discounted using a rate of return that the Company believes a market participant would require. Model results may be adjusted by management if the Company does not believe the output reflects the fair value of the instrument, as defined under U.S. GAAP. The models are updated at each measurement date to capture any changes in internal factors such as nature, term, volume, payment trends, remaining time to maturity, and portfolio mix, as well as changes in underwriting or observed trends expected to impact future performance.

Further details concerning loan receivables at fair value are presented within “Fair Value Measurement” section in this Note.

Net changes in the fair value of loan receivables included in the consolidated statements of operations in the line “loan revenues and fees, net of changes in fair value” was a gain of $687,479 and $4,898,876 for the three and six months ended June 30, 2024, respectively, and a loss of $1,821,700 and $837,048 for the three and six months ended June 30, 2023, respectively.

Lease Accounting

Lease Accounting - 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 leases at the commencement date as a lease liability, which is a lessee’s obligation to make lease payments arising from a lease measured on a discounted basis, and a right-to-use asset, which is an asset that represents the lessee’s right to use or control the use of a specified asset for the lease term. For more information on leases for which the Company is lessee, refer to Note 4 to the condensed consolidated financial statements. 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 with a customer 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 to the consolidated statements of operations is shown below:

	Three Months ended June 30,						Six Months ended June 30,
	2024			2023			2024			2023
Lease billings and accruals	$	34,686,893		$	32,501,656		$	69,971,769		$	66,756,740
Provision for doubtful accounts		(7,806,427	)		(10,847,413	)		(17,290,476	)		(22,085,828	)
Gain on sale of lease receivables		28,525			1,252,600			61,434			2,950,089
Lease placement collections		165,057			-			165,057			-
Lease revenues and fees	$	27,074,048		$	22,906,843		$	52,907,784		$	47,621,001

Deferred Debt Issuance Costs

Deferred Debt Issuance Costs - Debt issuance costs incurred in conjunction with the 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 $190,388 and $261,168 for the three and six months ended June 30, 2024, respectively, and $70,368 and $140,735 for the three and six months ended June 30, 2023, respectively.

Debt issuance costs incurred in conjunction with the subordinated Promissory Notes to related parties are offset against the outstanding balance of the loan payable and are amortized using the straight-line method over the remaining term of the related debt, which approximates the effective interest method. Amortization, which is included in interest expense, was $114,698 and $229,395 for the three and six months ended June 30, 2024, respectively, and $38,233 and $38,233 for the three and six months ended June 30, 2023, respectively.

Debt issuance costs incurred in conjunction with the Basepoint Credit Agreement entered into on June 7, 2023 are offset against the outstanding balance of the loan payable and are amortized using the straight-line method over the remaining term of the related debt, which approximates the effective interest method. Amortization, which is included in interest expense, was $9,617 and $19,234 for the three and six months ended June 30, 2024, respectively was $3,206 and $3,206 for the three and six months ended June 30, 2023, respectively.

Intangible Assets

Intangible Assets – Intangible assets consist of a patent on the Company’s LTO payment method at check-out for third party e-commerce sites and of assets acquired in connection with Revolution Transaction (See Note 14). The patent is 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 ten years.

In the Revolution Transaction, the Company identified intangible assets for the franchisee contract-based agreements, the related non-compete agreements, the Liberty Loan brand, the non-contractual customer relationships associated with the corporate locations and the list of previous customers. The franchisee contract-based agreements relate to the assignment of agreements with Liberty Tax franchisees in which their locations and staff are used to assist in the origination and servicing of a loan portfolio in exchange for a share of the net revenue. In addition, there is non-compete embedded in these agreements. The Liberty Loan brand intangible asset relates to the value associated with the established brands acquired in the transaction that would otherwise need to be licensed. The non-contractual customer relationship intangible asset is the value of the customer relationships for the corporate stores acquired in the transaction. The customer list intangible asset relates to the value of valuable customers information that will be used to market additional products. The franchisee contract-based agreement, the Liberty Loan brand and the non-compete intangible assets are amortized on a straight-line basis over the expected useful life of the assets of ten years. The non-contractual customer relationship intangible asset is amortized on a straight-line basis over a five-year estimated useful life. The customer list is amortized on a straight-line basis over a three-year estimated useful life.

For intangible assets with finite lives, tests for impairment must be performed if conditions exist that indicate the carrying amount may not be recoverable. Intangible assets amortization expense was $442,426 and $884,760 for the three and six months ended June 30, 2024, respectively, and $443,059 and $886,118 for the three and six months ended June 30, 2023, respectively.

Property and Equipment

Property and Equipment - Property and equipment are recorded at cost less accumulated depreciation. Depreciation is recognized over the estimated useful lives of the respective assets on a straight-line basis, ranging from 2 to 7 years. Repairs and maintenance expenditures are expensed as incurred, unless such expenses extend the useful life of the asset, in which case they are capitalized. Depreciation and amortization expense for property and equipment was $1,561,352 and $3,097,061 for the three and six months ended June 30, 2024, respectively, and $1,207,069 and $2,370,418 for the three and six months ended June 30, 2023, respectively.

Software Costs

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 $1,221,579 and $2,505,268 for the three and six months ended June 30, 2024, respectively, and $1,227,024 and $2,522,838 for the three and six months ended June 30, 2023, respectively. Capitalized software amortization expense was $1,203,688 and $2,351,166 for the three and six months ended June 30, 2024, respectively, and $961,061 and $1,870,405 for the three and six months ended June 30, 2023, respectively.

Data Costs

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 and amortized on a straight-line basis over their estimated 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.

Capitalized data costs amounted to $479,871 and $944,313 for the three and six months ended June 30, 2024, respectively, and $174,346 and $343,428 for the three and six months ended June 30, 2023, respectively. Capitalized data costs amortization expense was $378,951 and $716,392 for the three and six months ended June 30, 2024, respectively, and $234,417 and $454,167 for the three and six months ended June 30, 2023, respectively.

Capitalized data costs net of its amortization are included in the condensed consolidated balance sheets in Other assets, net.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets – We evaluate all long-lived assets, including intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the related assets may not be recoverable by the undiscounted net cash flow they will generate. Impairment is recognized when the carrying amounts of such assets exceed their fair value. For the three and six months ended June 30, 2024 there were no impairments.

Operating Expenses

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

Marketing Costs

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 - 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 9). 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 net income. Loss attributable to common shareholders is computed by increasing net loss by such dividends. Where the Company has a net loss, as the participating Series 1 Convertible Preferred Stock has no contractual obligation to share in the losses of the Company, there is no loss allocation between common stock and Series 1 Convertible Preferred Stock.

Basic earnings per common share is computed by dividing net income/(loss) available to common shareholders reduced by any dividends paid or declared on common and participating Series 1 Convertible Preferred Stock by the total of the weighted average number of common shares outstanding during the period.

Diluted earnings per share is based on the more dilutive of the if-converted method (which assumes conversion of the participating Series 1 Convertible Preferred Stock as of the beginning of the period) or the two-class method (which assumes that the participating Series 1 Convertible Preferred Stock is not converted) plus the potential impact of dilutive non-participating Series 2 Convertible Preferred Stock, options, performance share units and warrants. The dilutive effect of Series 2 Convertible Preferred Stock is computed using the if-converted method. The dilutive effect of options, performance share units and warrants are computed using the treasury stock method, which assumes the repurchase of common shares at the average market price during the period. Under the treasury stock method, options, performance share units and warrants will have a dilutive effect when the average price of common stock during the period exceeds the exercise price of options, performance share units or warrants. When there is a loss from continuing operations, potential common shares are not included in the computation of diluted loss per share since they have an anti-dilutive effect.

The following table reflects the number of common shares issuable upon conversion or exercise.

	June 30,
	2024		2023
Series 1 Convertible Preferred Stock		225,231		225,231
Series 2 Convertible Preferred Stock		5,845,695		5,845,695
Common Stock Options		4,397,447		5,435,572
Common Stock Warrants		2,255,184		2,255,184
Performance Share Units		937,499		1,250,000
		13,661,056		15,011,682

The following table sets forth the computation of basic and diluted earnings per common share for the six months ended June 30, 2024 and 2023:

	Six Months ended
	June 30,
	2024			2023
Numerator
Net loss	$	(1,817,238	)	$	(5,527,870	)
Series 2 Convertible Preferred Stock dividends		(2,161,198	)		(1,964,726	)
Net loss attributable to common and Series 1 Convertible Preferred Stock		(3,978,436	)		(7,492,596	)
Net income attributable to Series 1 Convertible Preferred Stock		-			-
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock		-			-
Net loss attributable to common shares- Numerator for basic EPS		(3,978,436	)	$	(7,492,596	)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends		-			-
Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS		(3,978,436	)		(7,492,596	)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS		21,527,869			21,751,807
Effect of dilutive securities:
Series 2 Convertible Preferred Stock		-			-
Series 1 Convertible Preferred Stock		-			-
Common stock options and performance share units		-			-
Common stock warrants		-			-
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS		21,527,869			21,751,807
Basic EPS	$	(0.18	)	$	(0.34	)
Diluted EPS	$	(0.18	)	$	(0.34	)

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended June 30, 2024 and 2023:

	Three Months ended
	June 30,
	2024			2023
Numerator
Net loss	$	(1,603,059	)	$	(5,297,655	)
Series 2 Convertible Preferred Stock dividends		(1,091,742	)		(992,493	)
Net loss attributable to common and Series 1 Convertible Preferred Stock		(2,694,801	)		(6,290,148	)
Net income attributable to Series 1 Convertible Preferred Stock		-			-
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock		-			-
Net loss attributable to common shares- Numerator for basic EPS		(2,694,801	)		(6,290,148	)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends		-			-
Net loss attributable to common shares after assumed conversions – Numerator for diluted EPS	$	(2,694,801	)	$	(6,290,148	)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS		21,469,720			21,752,304
Effect of dilutive securities
Series 2 Convertible Preferred Stock		-			-
Series 1 Convertible Preferred Stock		-			-
Common stock options and performance share units		-			-
Common stock warrants		-			-
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator for diluted EPS		21,469,720			21,752,304
Basic EPS	$	(0.13	)	$	(0.29	)
Diluted EPS	$	(0.13	)	$	(0.29	)

Stock-Based Compensation

Stock-Based Compensation – 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 10).

Fair Value of Financial Instruments

Fair Value of Financial Instruments – The carrying value of certain financial instruments such as cash, lease receivable, and accounts payable approximate their fair value due to their short-term nature. The carrying value of loans payable under the Credit Agreement, under Basepoint Credit Agreement and under the 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 loan receivables portfolio purchased from its bank partner and for the portfolio of loans directly acquired in the state licensed model.

Fair Value Measurements

Fair Value Measurements- 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 June 30, 2024 and December 31, 2023 is as follows:

	Fair Value Measurement Using						Carrying
Financial instruments – As of June 30, 2024 (1)	Level 1		Level 2		Level 3		Amount
Loan receivables at fair value	$	-	$	-	$	40,085,656	$	48,618,482

	Fair Value Measurement Using						Carrying
Financial instruments – As of December 31, 2023 (1)	Level 1		Level 2		Level 3		Amount
Loan receivables at fair value	$	-	$	-	$	35,794,290	$	48,076,705

(1)

For cash, lease receivable, and accounts payable the carrying amount is a reasonable estimate of fair value due to their short-term nature. The carrying value of loans payable under the Credit Agreement, the carrying value of loans payable under Basepoint Credit Agreement, and the carrying value of promissory notes to related parties approximates fair value based upon their interest rates, which approximate current market interest rates.

The Company primarily estimates the fair value of its loan receivables portfolio using discounted cash flow models. The models use inputs, such as estimated losses, servicing costs and discount rates, that are unobservable but reflect the Company’s best estimates of the assumptions a market participant would use to calculate fair value. Certain unobservable inputs may, in isolation, have either a directionally consistent or opposite impact on the fair value of the financial instrument for a given change in that input. An increase to the net loss rate, servicing cost, or discount rate would decrease the fair value of the Company’s loan receivables. When multiple inputs are used within the valuation techniques for loan receivables, a change in one input in a certain direction may be offset by an opposite change from another input.

The Company estimates the fair value of the promissory note related to acquisition using the discounted cash flow model. The model uses inputs including estimated cash flows and a discount rate.

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

●

Estimated losses are estimates of the principal payments that will not be repaid over the life of the loans, net of the expected principal recoveries on charged-off receivables. FlexShopper systems monitor collections and portfolio performance data that are used to continually refine the analytical models and statistical measures used in making marketing and underwriting decisions. Leveraging the data at the core of the business, the Company utilizes the models to estimate lifetime credit losses for loan receivables. Inputs to the models include expected cash flows, historical and current performance, and behavioral information. Management may also incorporate discretionary adjustments based on the Company’s expectations of future credit performance.

●

Servicing costs – Servicing costs applied to the expected cash flows of the portfolio reflect the Company estimate of the amount investors would incur to service the underlying assets for the remainder of their lives. Servicing costs are derived from the Company internal analysis of our cost structure considering the characteristics of the receivables and have been benchmarked against observable information on comparable assets in the marketplace.

●

Discount rates – the discount rates utilized in the cash flow analyses reflect the Company estimates of the rates of return that investors would require when investing in financial instruments with similar risk and return characteristics.

For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents a reconciliation of the beginning and ending balances for the six months ended June 30, 2024 and the year ended December 31, 2023:

	Six Months Ended June 30, 2024			Year Ended December 31, 2023
Beginning balance	$	35,794,290		$	32,932,504
Purchases of loan participation		1,058,998			389,949
Obligation of loan participation		-			(12,931	)
Loan originations		26,200,446			57,554,746
Interest and fees⁽¹⁾		5,746,776			14,801,188
Collections		(32,554,732	)		(80,089,020	)
Net charge off ⁽¹⁾		(2,411,225	)		(11,041,155	)
Net change in fair value⁽¹⁾		6,251,103			21,259,009
Ending balance	$	40,085,656		$	35,794,290

(1)	Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statements of operations

For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents quantitative information about the inputs used in the fair value measurement as of June 30, 2024 and December 31, 2023:

	June 30, 2024									December 31, 2023
	Minimum			Maximum			Weighted Average⁽²⁾			Minimum			Maximum			Weighted Average
Estimated losses⁽¹⁾		0	%		92.4	%		21.4	%		0	%		92.5	%		28.9	%
Servicing costs		-			-			4.4	%		-			-			4.7	%
Discount rate		-			-			20.5	%		-			-			20.1	%

(1)	Figure disclosed as a percentage of outstanding principal balance.
(2)	Unobservable inputs were weighted by outstanding principal balance, which are grouped by origination channel.

Other relevant data as of June 30, 2024 and December 31, 2023 concerning loan receivables at fair value are as follows:

	June 30, 2024		December 31, 2023
Aggregate fair value of loan receivables that are 90 days or more past due	$	33,104,613	$	27,828,083
Unpaid principal balance of loan receivables that are 90 days or more past due		42,613,754		41,208,009
Aggregate fair value of loan receivables in non-accrual status		33,119,327		27,764,926

Income Taxes

Income Taxes – 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 June 30, 2024, the Company had not recorded any unrecognized tax benefits. Interest and penalties related to liabilities for uncertain tax positions will be charged to interest and operating expenses.

Employee Benefit Plan

6 Months Ended

Jun. 30, 2024

Employee Benefit Plan [Abstract]

EMPLOYEE BENEFIT PLAN

16. EMPLOYEE BENEFIT PLAN

The Company sponsors an employee retirement savings plan that qualifies under Section 401(k) of the Internal Revenue Code. Participating employees may contribute, but not more than statutory limits. The Company makes nondiscretionary 4% Safe Harbor contributions of participants’ eligible earnings who have completed the plan’s eligibility requirements. The contributions are made to the plan on behalf of the employees. Total contributions to the plan were $48,109 and $97,816 for the three and six months ended June 30, 2024, respectively, and $36,601 and $86,762 for the three and six months ended June 30, 2023, respectively.

Loan Payable Under Credit Agreement (Details) - Schedule of Covenant Requirements and FlexShopper's Actual Results	Jun. 30, 2024 USD ($) $ / shares
Required Covenant [Member]
Schedule of Covenant Requirements and FlexShopper [Line Items]
Equity Book Value not less than	$ 16,452,246
Liquidity greater than	3,500,000
Cash greater than	$ 2,500,000
Consolidated Total Debt to Equity Book Value ratio not to exceed (in Dollars per share) \| $ / shares	$ 5.25
Actual Position [Member]
Schedule of Covenant Requirements and FlexShopper [Line Items]
Equity Book Value not less than	$ 27,481,239
Liquidity greater than	10,346,383
Cash greater than	$ 4,892,912
Consolidated Total Debt to Equity Book Value ratio not to exceed (in Dollars per share) \| $ / shares	$ 4.72

- Definition

Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation.

+ References + Details

Commitments

6 Months Ended

Jun. 30, 2024

Commitments [Abstract]

COMMITMENTS

13. COMMITMENTS

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

Property and Equipment

6 Months Ended

Jun. 30, 2024

Property and Equipment [Abstract]

PROPERTY AND EQUIPMENT

5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	Estimated Useful Lives	June 30, 2024			December 31, 2023
Furniture, fixtures and vehicle	2-5 years	$	395,867		$	395,868
Website and internal use software	3 years		28,291,589			25,786,321
Computers and software	3-7 years		5,465,155			4,763,115
			34,152,611			30,945,304
Less: accumulated depreciation and amortization			(24,733,506	)		(21,636,445	)
		$	9,419,105		$	9,308,859

Depreciation and amortization expense for property and equipment was $1,561,352 and $3,097,061 for the three and six months ended June 30, 2024, respectively, and $1,207,069 and $2,370,418 for the three and six months ended June 30, 2023, respectively.

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies [Abstract]

Schedule of Lease Receivables Balances

The lease receivables balances consisted of the following as of June 30, 2024 and December 31, 2023:

	June 30, 2024			December 31, 2023

Lease receivables	$	90,159,481		$	64,749,918
Allowance for doubtful accounts		(33,008,354	)		(19,954,828	)
Lease receivables, net	$	57,151,127		$	44,795,090

Schedule of Lease Receivables Balances Charged Off Against the Allowance

	Six Months Ended June 30, 2024			Year Ended December 31, 2023
Beginning balance	$	19,954,828		$	13,078,800
Provision		17,290,476			42,505,647
Accounts written off		(4,236,950	)		(35,629,619	)
Ending balance	$	33,008,354		$	19,954,828

Schedule of Net Lease Merchandise Balances

The net lease merchandise balances consisted of the following as of June 30, 2024 and December 31, 2023:

	June 30, 2024			December 31, 2023
Lease merchandise at cost	$	48,811,580		$	49,687,498
Accumulated depreciation and impairment reserve		(22,955,038	)		(20,556,058	)
Lease merchandise, net	$	25,856,542		$	29,131,440

Schedule of Lessor Revenues and Fees

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

	Three Months ended June 30,						Six Months ended June 30,
	2024			2023			2024			2023
Lease billings and accruals	$	34,686,893		$	32,501,656		$	69,971,769		$	66,756,740
Provision for doubtful accounts		(7,806,427	)		(10,847,413	)		(17,290,476	)		(22,085,828	)
Gain on sale of lease receivables		28,525			1,252,600			61,434			2,950,089
Lease placement collections		165,057			-			165,057			-
Lease revenues and fees	$	27,074,048		$	22,906,843		$	52,907,784		$	47,621,001

Schedule of Number of Common Shares Issuable Upon Conversion or Exercise

The following table reflects the number of common shares issuable upon conversion or exercise.

	June 30,
	2024		2023
Series 1 Convertible Preferred Stock		225,231		225,231
Series 2 Convertible Preferred Stock		5,845,695		5,845,695
Common Stock Options		4,397,447		5,435,572
Common Stock Warrants		2,255,184		2,255,184
Performance Share Units		937,499		1,250,000
		13,661,056		15,011,682

Schedule of Computation of Basic and Diluted Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per common share for the six months ended June 30, 2024 and 2023:

	Six Months ended
	June 30,
	2024			2023
Numerator
Net loss	$	(1,817,238	)	$	(5,527,870	)
Series 2 Convertible Preferred Stock dividends		(2,161,198	)		(1,964,726	)
Net loss attributable to common and Series 1 Convertible Preferred Stock		(3,978,436	)		(7,492,596	)
Net income attributable to Series 1 Convertible Preferred Stock		-			-
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock		-			-
Net loss attributable to common shares- Numerator for basic EPS		(3,978,436	)	$	(7,492,596	)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends		-			-
Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS		(3,978,436	)		(7,492,596	)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS		21,527,869			21,751,807
Effect of dilutive securities:
Series 2 Convertible Preferred Stock		-			-
Series 1 Convertible Preferred Stock		-			-
Common stock options and performance share units		-			-
Common stock warrants		-			-
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS		21,527,869			21,751,807
Basic EPS	$	(0.18	)	$	(0.34	)
Diluted EPS	$	(0.18	)	$	(0.34	)

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended June 30, 2024 and 2023:

	Three Months ended
	June 30,
	2024			2023
Numerator
Net loss	$	(1,603,059	)	$	(5,297,655	)
Series 2 Convertible Preferred Stock dividends		(1,091,742	)		(992,493	)
Net loss attributable to common and Series 1 Convertible Preferred Stock		(2,694,801	)		(6,290,148	)
Net income attributable to Series 1 Convertible Preferred Stock		-			-
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock		-			-
Net loss attributable to common shares- Numerator for basic EPS		(2,694,801	)		(6,290,148	)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends		-			-
Net loss attributable to common shares after assumed conversions – Numerator for diluted EPS	$	(2,694,801	)	$	(6,290,148	)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS		21,469,720			21,752,304
Effect of dilutive securities
Series 2 Convertible Preferred Stock		-			-
Series 1 Convertible Preferred Stock		-			-
Common stock options and performance share units		-			-
Common stock warrants		-			-
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator for diluted EPS		21,469,720			21,752,304
Basic EPS	$	(0.13	)	$	(0.29	)
Diluted EPS	$	(0.13	)	$	(0.29	)

Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis

The Company’s financial instruments that are measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 is as follows:

	Fair Value Measurement Using						Carrying
Financial instruments – As of June 30, 2024 (1)	Level 1		Level 2		Level 3		Amount
Loan receivables at fair value	$	-	$	-	$	40,085,656	$	48,618,482

	Fair Value Measurement Using						Carrying
Financial instruments – As of December 31, 2023 (1)	Level 1		Level 2		Level 3		Amount
Loan receivables at fair value	$	-	$	-	$	35,794,290	$	48,076,705

(1)

Schedule of Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation

	Six Months Ended June 30, 2024			Year Ended December 31, 2023
Beginning balance	$	35,794,290		$	32,932,504
Purchases of loan participation		1,058,998			389,949
Obligation of loan participation		-			(12,931	)
Loan originations		26,200,446			57,554,746
Interest and fees⁽¹⁾		5,746,776			14,801,188
Collections		(32,554,732	)		(80,089,020	)
Net charge off ⁽¹⁾		(2,411,225	)		(11,041,155	)
Net change in fair value⁽¹⁾		6,251,103			21,259,009
Ending balance	$	40,085,656		$	35,794,290

(1)	Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statements of operations

Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement

	June 30, 2024									December 31, 2023
	Minimum			Maximum			Weighted Average⁽²⁾			Minimum			Maximum			Weighted Average
Estimated losses⁽¹⁾		0	%		92.4	%		21.4	%		0	%		92.5	%		28.9	%
Servicing costs		-			-			4.4	%		-			-			4.7	%
Discount rate		-			-			20.5	%		-			-			20.1	%

(1)	Figure disclosed as a percentage of outstanding principal balance.
(2)	Unobservable inputs were weighted by outstanding principal balance, which are grouped by origination channel.

Schedule of Concerning Loan Receivables at Fair Value

Other relevant data as of June 30, 2024 and December 31, 2023 concerning loan receivables at fair value are as follows:

	June 30, 2024		December 31, 2023
Aggregate fair value of loan receivables that are 90 days or more past due	$	33,104,613	$	27,828,083
Unpaid principal balance of loan receivables that are 90 days or more past due		42,613,754		41,208,009
Aggregate fair value of loan receivables in non-accrual status		33,119,327		27,764,926

Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Schedule of Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases is as follows:

	Balance Sheet Classification	June 30, 2024		December 31, 2023
Assets
Operating Lease Asset	Right of use asset, net	$	1,142,104	$	1,233,538
Finance Lease Asset	Right of use asset, net		-		3,472
Total Lease Assets		$	1,142,104	$	1,237,010

Liabilities
Operating Lease Liability – current portion	Current Lease Liabilities	$	263,104	$	240,444
Finance Lease Liability – current portion	Current Lease Liabilities		7		4,608
Operating Lease Liability – net of current portion	Long Term Lease Liabilities		1,184,683		1,321,578
Total Lease Liabilities		$	1,447,794	$	1,566,630

Schedule of Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term

Below is a summary of the weighted-average discount rate and weighted-average remaining lease term for the Company’s leases:

	Weighted Average Discount Rate			Weighted Average Remaining Lease Term (in years)
Operating Leases		13.03	%		4
Finance Leases		13.39	%		-

Schedule of Supplemental Cash Flow Information Related to Operating Leases

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

	Six Months ended
	June 30,
	2024		2023
Cash payments for operating leases	$	212,938	$	206,736
Cash payments for finance leases		4,782		4,782

Schedule of Undiscounted Operating Lease Liabilities

	Operating Leases
2024		217,197
2025		443,038
2026		456,330
2027		470,019
2028 and thereafter		303,574
Total undiscounted cash flows		1,890,158
Less: interest		(442,371	)
Present value of lease liabilities	$	1,447,787

Schedule of Undiscounted Finance Lease Liabilities

	Finance Leases
2024		7
Total undiscounted cash flows		7
Less: interest		-
Present value of lease liabilities	$	7

Promissory Notes-Related Parties (Details) - USD ($)	3 Months Ended		6 Months Ended
Promissory Notes-Related Parties (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Jan. 25, 2019
Promissory Notes-Related Parties [Line Items]
Interest paid		$ 53,346		$ 105,988
Interest expense		53,346		105,022
Deferred debt cost			$ 917,581
NRNS [Member]
Promissory Notes-Related Parties [Line Items]
Interest paid	$ 547,717	573,466	1,130,537	1,139,375
Interest expense	$ 523,415	$ 573,466	$ 1,106,010	$ 1,128,987
Bear interest rate	19.44%		19.44%
Promissory Note Borrower [Member] \| NRNS [Member]
Promissory Notes-Related Parties [Line Items]
Principal amount	$ 3,750,000		$ 3,750,000
NRNS [Member]
Promissory Notes-Related Parties [Line Items]
Maturity date			Jul. 01, 2024
Minimum [Member]
Promissory Notes-Related Parties [Line Items]
Credit commitment			$ 3,750,000
Maximum [Member]
Promissory Notes-Related Parties [Line Items]
Credit commitment			$ 11,000,000
Chief Financial Officer [Member] \| H.Russell Heiser [Member]
Promissory Notes-Related Parties [Line Items]
Principal amount					$ 1,000,000

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Loan payable under credit agreement to beneficial shareholder, net of unamortized issuance costs (in Dollars)	$ 1,332,712	$ 70,780
Loan payable under Basepoint credit agreement, net of unamortized issuance costs (in Dollars)	$ 73,730	$ 92,964
Common stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	21,988,711	21,752,304
Treasury shares	346,258	164,029
Related Party
Promissory note related to acquisition, net of discount (in Dollars)	$ 420,558	$ 649,953
Series 1 Convertible Preferred Stock
Convertible preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized	250,000	250,000
Convertible preferred stock, shares issued	170,332	170,332
Convertible preferred stock, shares outstanding	170,332	170,332
Convertible preferred stock, stated value (in Dollars)	$ 5	$ 5
Series 2 Convertible Preferred Stock
Convertible preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized	25,000	25,000
Convertible preferred stock, shares issued	21,952	21,952
Convertible preferred stock, shares outstanding	21,952	21,952
Convertible preferred stock, stated value (in Dollars)	$ 1,000	$ 1,000

Summary of Significant Accounting Policies (Details) - Schedule of Number of Common Shares Issuable Upon Conversion or Exercise - shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items]
Antidilutive securities excluded from computation of earnings per share	13,661,056	15,011,682
Series 1 Convertible Preferred Stock [Member]
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items]
Antidilutive securities excluded from computation of earnings per share	225,231	225,231
Series 2 Convertible Preferred Stock [Member]
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items]
Antidilutive securities excluded from computation of earnings per share	5,845,695	5,845,695
Common Stock Options [Member]
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items]
Antidilutive securities excluded from computation of earnings per share	4,397,447	5,435,572
Common Stock Warrants [Member]
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items]
Antidilutive securities excluded from computation of earnings per share	2,255,184	2,255,184
Performance Share Units [Member]
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise [Line Items]
Antidilutive securities excluded from computation of earnings per share	937,499	1,250,000

Leases (Details)			3 Months Ended		6 Months Ended
Leases (Details)	Sep. 30, 2021 USD ($)	Jan. 31, 2019 USD ($) ft²	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)
Leases [Abstract]
Area of land (in Square Feet) \| ft²		21,622
Monthly rent	$ 8,800	$ 31,500
Rent expanses					$ 1,800
Lease cost			$ 98,993	$ 97,367	$ 198,097	$ 194,623

Promissory Notes-Related Parties (Tables)

6 Months Ended

Jun. 30, 2024

Promissory Notes-Related Parties [Abstract]

Schedule of Amounts Payable Under the Promissory Notes

Amounts payable under the promissory notes are as follows:

	Debt Principal		Interest
2024	$	-	$	174,096
2025	$	10,750,000	$	-

Summary of Significant Accounting Policies (Details)	3 Months Ended		6 Months Ended
Summary of Significant Accounting Policies (Details)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2023
Summary of Significant Accounting Policies [Line Items]
Operating segment			1
Lease receivables balances charged off	$ 2,230,263	$ 13,757,036	$ 4,236,950	$ 32,728,807
Net of changes in fair value	687,479	1,821,700	(4,898,876)	837,048
Interest expense	5,226,155	4,568,557	10,541,249	9,099,884
Intangible asset amortization expense	442,426	443,059	884,760	886,118
Depreciation and amortization expense	$ 1,561,352	1,207,069	$ 3,097,061	2,370,418
Largest benefit percentage			50.00%
Patents [Member]
Summary of Significant Accounting Policies [Line Items]
Intangible assets, terms	10 years		10 years		10 years
Deferred Debt Issuance Costs [Member]
Summary of Significant Accounting Policies [Line Items]
Capitalized software amortization expense	$ 1,203,688
Promissory Notes [Member] \| Deferred Debt Issuance Costs [Member]
Summary of Significant Accounting Policies [Line Items]
Interest expense			$ 229,395
Minimum [Member]
Summary of Significant Accounting Policies [Line Items]
Intangible assets, terms	2 years		2 years
Maximum [Member]
Summary of Significant Accounting Policies [Line Items]
Intangible assets, terms	7 years		7 years
Credit Agreement [Member] \| Deferred Debt Issuance Costs [Member]
Summary of Significant Accounting Policies [Line Items]
Interest expense	$ 190,388	70,368	$ 261,168	140,735
Basepoint Credit Agreement [Member] \| Deferred Debt Issuance Costs [Member]
Summary of Significant Accounting Policies [Line Items]
Interest expense	9,617	3,206	19,234	3,206
Promissory Notes [Member] \| Deferred Debt Issuance Costs [Member]
Summary of Significant Accounting Policies [Line Items]
Interest expense	114,698	38,233		38,233
Software [Member]
Summary of Significant Accounting Policies [Line Items]
Capitalized software costs	1,221,579	1,227,024	2,505,268	2,522,838
Capitalized software amortization expense		961,061	2,351,166	1,870,405
Data [Member]
Summary of Significant Accounting Policies [Line Items]
Capitalized software costs	479,871	174,346	944,313	343,428
Capitalized software amortization expense	$ 378,951	$ 234,417	$ 716,392	$ 454,167

Loan Payable Under Credit Agreement (Details) - USD ($)			3 Months Ended		6 Months Ended
Loan Payable Under Credit Agreement (Details) - USD ($)	Mar. 27, 2024	Sep. 30, 2022	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Loan Payable Under Credit Agreement [Line Items]
Commitment termination date					Apr. 01, 2024
Borrowed under credit agreement	$ 150,000,000
Lender fee percentage	1.00%
Borrowed bear interest			14.44%		14.44%
Repaid credit agreement				$ 220,000		$ 2,795,000
Waterfall Asset Management, LLC [Member]
Loan Payable Under Credit Agreement [Line Items]
Commitment loan percentage		100.00%
SOFR Plus [Member]
Loan Payable Under Credit Agreement [Line Items]
Interest rate	9.00%				11.00%
Credit Agreement [Member]
Loan Payable Under Credit Agreement [Line Items]
Borrowed under credit agreement			$ 11,750,000	0	$ 22,361,690	2,750,000
Repaid credit agreement			0		0
Interest expense			4,137,318	$ 3,332,686	8,422,665	$ 6,611,523
Outstanding under credit agreement			118,816,690		118,816,690		$ 96,455,000
Unamortized issuance costs			$ 1,332,712		$ 1,332,712		$ 70,780

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

	June 30, 2024			December 31, 2023

Lease receivables	$	90,159,481		$	64,749,918
Allowance for doubtful accounts		(33,008,354	)		(19,954,828	)
Lease receivables, net	$	57,151,127		$	44,795,090

	Six Months Ended June 30, 2024			Year Ended December 31, 2023
Beginning balance	$	19,954,828		$	13,078,800
Provision		17,290,476			42,505,647
Accounts written off		(4,236,950	)		(35,629,619	)
Ending balance	$	33,008,354		$	19,954,828

The net lease merchandise balances consisted of the following as of June 30, 2024 and December 31, 2023:

	June 30, 2024			December 31, 2023
Lease merchandise at cost	$	48,811,580		$	49,687,498
Accumulated depreciation and impairment reserve		(22,955,038	)		(20,556,058	)
Lease merchandise, net	$	25,856,542		$	29,131,440

Further details concerning loan receivables at fair value are presented within “Fair Value Measurement” section in this Note.

	Three Months ended June 30,						Six Months ended June 30,
	2024			2023			2024			2023
Lease billings and accruals	$	34,686,893		$	32,501,656		$	69,971,769		$	66,756,740
Provision for doubtful accounts		(7,806,427	)		(10,847,413	)		(17,290,476	)		(22,085,828	)
Gain on sale of lease receivables		28,525			1,252,600			61,434			2,950,089
Lease placement collections		165,057			-			165,057			-
Lease revenues and fees	$	27,074,048		$	22,906,843		$	52,907,784		$	47,621,001

Capitalized data costs net of its amortization are included in the condensed consolidated balance sheets in Other assets, net.

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

The following table reflects the number of common shares issuable upon conversion or exercise.

	June 30,
	2024		2023
Series 1 Convertible Preferred Stock		225,231		225,231
Series 2 Convertible Preferred Stock		5,845,695		5,845,695
Common Stock Options		4,397,447		5,435,572
Common Stock Warrants		2,255,184		2,255,184
Performance Share Units		937,499		1,250,000
		13,661,056		15,011,682

The following table sets forth the computation of basic and diluted earnings per common share for the six months ended June 30, 2024 and 2023:

	Six Months ended
	June 30,
	2024			2023
Numerator
Net loss	$	(1,817,238	)	$	(5,527,870	)
Series 2 Convertible Preferred Stock dividends		(2,161,198	)		(1,964,726	)
Net loss attributable to common and Series 1 Convertible Preferred Stock		(3,978,436	)		(7,492,596	)
Net income attributable to Series 1 Convertible Preferred Stock		-			-
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock		-			-
Net loss attributable to common shares- Numerator for basic EPS		(3,978,436	)	$	(7,492,596	)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends		-			-
Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS		(3,978,436	)		(7,492,596	)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS		21,527,869			21,751,807
Effect of dilutive securities:
Series 2 Convertible Preferred Stock		-			-
Series 1 Convertible Preferred Stock		-			-
Common stock options and performance share units		-			-
Common stock warrants		-			-
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS		21,527,869			21,751,807
Basic EPS	$	(0.18	)	$	(0.34	)
Diluted EPS	$	(0.18	)	$	(0.34	)

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended June 30, 2024 and 2023:

	Three Months ended
	June 30,
	2024			2023
Numerator
Net loss	$	(1,603,059	)	$	(5,297,655	)
Series 2 Convertible Preferred Stock dividends		(1,091,742	)		(992,493	)
Net loss attributable to common and Series 1 Convertible Preferred Stock		(2,694,801	)		(6,290,148	)
Net income attributable to Series 1 Convertible Preferred Stock		-			-
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock		-			-
Net loss attributable to common shares- Numerator for basic EPS		(2,694,801	)		(6,290,148	)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends		-			-
Net loss attributable to common shares after assumed conversions – Numerator for diluted EPS	$	(2,694,801	)	$	(6,290,148	)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS		21,469,720			21,752,304
Effect of dilutive securities
Series 2 Convertible Preferred Stock		-			-
Series 1 Convertible Preferred Stock		-			-
Common stock options and performance share units		-			-
Common stock warrants		-			-
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator for diluted EPS		21,469,720			21,752,304
Basic EPS	$	(0.13	)	$	(0.29	)
Diluted EPS	$	(0.13	)	$	(0.29	)

The Company utilizes the fair value option on its entire loan receivables portfolio purchased from its bank partner and for the portfolio of loans directly acquired in the state licensed model.

	●	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 June 30, 2024 and December 31, 2023 is as follows:

	Fair Value Measurement Using						Carrying
Financial instruments – As of June 30, 2024 (1)	Level 1		Level 2		Level 3		Amount
Loan receivables at fair value	$	-	$	-	$	40,085,656	$	48,618,482

	Fair Value Measurement Using						Carrying
Financial instruments – As of December 31, 2023 (1)	Level 1		Level 2		Level 3		Amount
Loan receivables at fair value	$	-	$	-	$	35,794,290	$	48,076,705

(1)

The Company estimates the fair value of the promissory note related to acquisition using the discounted cash flow model. The model uses inputs including estimated cash flows and a discount rate.

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

●

	Six Months Ended June 30, 2024			Year Ended December 31, 2023
Beginning balance	$	35,794,290		$	32,932,504
Purchases of loan participation		1,058,998			389,949
Obligation of loan participation		-			(12,931	)
Loan originations		26,200,446			57,554,746
Interest and fees⁽¹⁾		5,746,776			14,801,188
Collections		(32,554,732	)		(80,089,020	)
Net charge off ⁽¹⁾		(2,411,225	)		(11,041,155	)
Net change in fair value⁽¹⁾		6,251,103			21,259,009
Ending balance	$	40,085,656		$	35,794,290

(1)	Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statements of operations

	June 30, 2024									December 31, 2023
	Minimum			Maximum			Weighted Average⁽²⁾			Minimum			Maximum			Weighted Average
Estimated losses⁽¹⁾		0	%		92.4	%		21.4	%		0	%		92.5	%		28.9	%
Servicing costs		-			-			4.4	%		-			-			4.7	%
Discount rate		-			-			20.5	%		-			-			20.1	%

(1)	Figure disclosed as a percentage of outstanding principal balance.
(2)	Unobservable inputs were weighted by outstanding principal balance, which are grouped by origination channel.

Other relevant data as of June 30, 2024 and December 31, 2023 concerning loan receivables at fair value are as follows:

	June 30, 2024		December 31, 2023
Aggregate fair value of loan receivables that are 90 days or more past due	$	33,104,613	$	27,828,083
Unpaid principal balance of loan receivables that are 90 days or more past due		42,613,754		41,208,009
Aggregate fair value of loan receivables in non-accrual status		33,119,327		27,764,926

Leases (Details) - Schedule of Supplemental Cash Flow Information Related to Operating Leases - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Schedule of Supplemental Cash Flow Information Related to Operating Leases [Abstract]
Cash payments for operating leases	$ 212,938	$ 206,736
Cash payments for finance leases	$ 4,782	$ 4,782

Revolution Transaction

6 Months Ended

Jun. 30, 2024

Revolution Transaction [Abstract]

REVOLUTION TRANSACTION

14. REVOLUTION TRANSACTION

On December 3, 2022, Flex Revolution, LLC, a wholly-owned subsidiary of FlexShopper, Inc. (the “Buyer”) closed a transaction (“Revolution Transaction”) pursuant to an Asset Purchase Agreement with Revolution Financial, Inc., a provider of consumer loans and credit products (collectively with certain of its subsidiaries, “Revolution”), under which the Company acquired the material net assets of the Revolution business.

In consideration for the sale of the Revolution net assets, the Company issued an adjustable promissory note (“Seller Note”) with an initial principal amount of $5,000,000. The Seller Note matures on December 1, 2027, bears interest at 8% per annum and is subject to adjustment based upon the pre-tax net income of the acquired business in 2023. The fair value of the Seller Note as of the acquisition date was $3,421,991.

The Revolution Transaction includes the Buyer’s assumption of Revolution’s consumer loan portfolio, related cash and its credit facility (“Revolution Credit Facility”) as this facility is backed by the portfolio acquired. On June 7, 2023, the Revolution Credit Facility was legally transferred to FlexShopper (See Note 15).

The parties to the Asset Purchase Agreement have each made customary representations and warranties in the Asset Purchase Agreement and have agreed to indemnify each other for breaches of such representations and warranties. The Buyer’s primary recourse in the event of a claim is to offset the Seller Note equal to the indemnifiable losses subject to such claim.

The Revolution Transaction has been accounted for as a business combination in accordance with ASC 805, Business Combination. The Company measured the net assets acquired in Revolution Transaction at fair value on the acquisition date.

The fair value of the intangible assets was determined primarily by using discounted cash flow models. The models use inputs including estimated cash flows and a discount rate.

The Company recorded a bargain purchase gain of $14,461,274 related to the Revolution Transaction at acquisition date as the fair value of the net assets acquired exceed the fair value of the purchase price consideration. The Company believes that the most significant reason its management was able to negotiate a bargain purchase was due to the speed with which the seller wanted to close this transaction which resulted in a non-competitive process akin to a forced sale. The strong desire for a prior to year-end closing was for various reasons, including potential credit facility covenant issues and accelerating operating losses after recent regulatory changes.

On December 31, 2023, the promissory note related to acquisition was adjusted based upon the pre-tax loss of the acquired business in 2023 and based on this the Company recognized in the year ended December 31, 2023 a positive net change in fair value of promissory note related to acquisition of $3,678,689.

Basepoint Credit Agreement

6 Months Ended

Jun. 30, 2024

Basepoint Credit Agreement [Abstract]

BASEPOINT CREDIT AGREEMENT

15. BASEPOINT CREDIT AGREEMENT

On June 7, 2023, the Company, through a wholly owned subsidiary, Flex Revolution, LLC (the “New Borrower”) entered into a Joinder Agreement to a credit agreement (the “Basepoint Credit Agreement”) with Revolution Financial, Inc. (the “Existing Borrower”), the subsidiary guarantors party thereto, the lenders party thereto, the individual guarantor party and BP Fundco, LLC, as administrative agent.

The Existing Borrower with certain of its subsidiaries (collectively, the “Seller”) and Flex Revolution, LLC (the “Buyer”) entered into an Asset Purchase Agreement (See Note 14), pursuant to which the Seller agreed to, among other things, transfer substantially all of its assets to the Buyer.

In the Basepoint Credit Agreement, the New Borrower agreed to become a borrower (the “Borrower”) and a grantor as applicable under the agreement. The Company is a guarantor of the Basepoint Credit Agreement.

The Basepoint Credit Agreement provides for an up to a $20 million credit facility for the origination of consumer loans. The credit facility is backed by eligible principal balance of eligible consumer receivable of the borrower’s portfolio (the “Borrowing Base”). The annual interest rate on loans under the Basepoint Credit Agreement is 13.42%. The principal balance outstanding under the Basepoint Credit Agreement is due on June 7, 2026.

The Basepoint Credit Agreement includes covenants requiring the Borrower and the guarantor to maintain a minimum amount of liquidity that is no less than 5% of the current Borrowing Base and maintain a minimum amount of cash held in the concentration accounts of $200,0000. The tangible net worth of the borrower and the guarantor shall not be less than 10% of the current Borrowing Base and the borrower and the guarantor shall maintain a positive consolidated net income. The terms tangible net worth and positive consolidated net income for the purpose of calculating the covenants under the Basepoint Credit Agreement are defined in the agreement. The Company is in compliance with Basepoint Credit Agreement covenants as of June 30, 2024.

The Basepoint Credit Agreement includes customary events of default, including, among others, failures to make payment of principal and interest, breaches or defaults under the terms of the Basepoint Credit Agreement, breaches of representations, warranties or certifications made by or on behalf of the borrower in the Basepoint Credit Agreement and related documents (including certain covenants), deficiencies in the Borrowing Base, certain judgments against the borrower and bankruptcy events.

Interest expense incurred under the Basepoint Credit Agreement amounted to $251,614 and $503,501 for the three and six months ended June 30, 2024, respectively. The outstanding balance under the Basepoint Credit Agreement was $7,412,605 as of June 30, 2024. Such amount is presented in the consolidated balance sheets net of unamortized issuance costs of $73,730 as of June 30, 2024. Interest is payable weekly on the outstanding balance of the amounts borrowed. No principal is expected to be repaid in the next twelve months, or from reductions in the borrowing base. Accordingly, all principal is shown as a non-current liability at June 30, 2024.

Equity Compensation Plans (Details) - Schedule of Stock-Based Compensation Expense - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Schedule of Stock-Based Compensation Expense [Line Items]
Total stock-based compensation	$ 154,873	$ 443,800	$ 371,998	$ 864,548
Stock options [Member]
Schedule of Stock-Based Compensation Expense [Line Items]
Total stock-based compensation	80,463	384,396	160,907	805,144
Performance share units [Member]
Schedule of Stock-Based Compensation Expense [Line Items]
Total stock-based compensation	$ 74,410	$ 59,404	$ 211,091	$ 59,404

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480483/718-10-35-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(3)
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+ Details

Equity Compensation Plans

6 Months Ended

Jun. 30, 2024

Equity Compensation Plans [Abstract]

EQUITY COMPENSATION PLANS

10. EQUITY COMPENSATION PLANS

In April 2018, the Company adopted the FlexShopper, Inc. 2018 Omnibus Equity Compensation Plan (the “2018 Plan”). The 2018 Plan replaced the Prior Plans. No new awards will be granted under the Prior Plans; however, awards outstanding under the Prior Plans upon approval of the 2018 Plan remain subject to and will be settled with shares under the applicable Prior Plan.

Grants under the 2018 Plan and the Prior Plans consist of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units, dividend equivalents and other stock-based awards. Employees, directors and consultants and other service providers are eligible to participate in the 2018 Plan and the Prior Plans. As June 30, 2024, approximately 2,150,000 shares remained available for issuance under the 2018 plan.

Stock-based compensation expense included the following components:

	Three Months ended June 30,				Six Months ended June 30,
	2024		2023		2024		2023
Stock options	$	80,463	$	384,396	$	160,907	$	805,144
Performance share units		74,410		59,404		211,091		59,404
Total stock-based compensation	$	154,873	$	443,800	$	371,998	$	864,548

The fair value of stock-based compensation is recognized as compensation expense over the vesting period. Compensation expense recorded for stock-based compensation in the condensed consolidated statements of operations was $154,873 and $371,998 for the three and six months ended June 30, 2024, respectively, and $443,800 and $864,548 for the three and six months ended June 30, 2023, respectively. Unrecognized compensation cost related to non-vested options and PSU at June 30, 2024 amounted to $809,543, which is expected to be recognized over a weighted average period of 1.84 years.

Stock options:

The fair value of stock options is recognized as compensation expense using the straight-line method over the vesting period. The Company measured the fair value of each stock option award on the date of grant using the Black-Scholes-Merton (BSM). The Company did not grant stock options during the six months ended June 30, 2024. The weighted average assumptions used for the stock options granted during the six months ended June 30, 2023 were as follows:

	Six Months ended June 30, 2023
Exercise price	$	0.79
Expected life		6 years
Expected volatility		96	%
Dividend yield		0	%
Risk-free interest rate		3.54	%

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

Activity in stock options for the six month periods ended June 30, 2024 and June 30, 2023 was as follows:

	Number of options			Weighted average exercise price		Weighted average contractual term (years)		Aggregate intrinsic value
Outstanding at January 1, 2024		4,452,447		$	1.57			$	2,152,602
Granted		-
Exercised/Released		-
Expired		(55,000	)		8.00				-
Outstanding at June 30, 2024		4,397,447		$	1.49		6.93	$	1,118,281
Vested and exercisable at June 30, 2024		3,661,778		$	1.56		6.71	$	855,491

Outstanding at January 1, 2023		3,919,228		$	1.97			$	52,223
Granted		1,517,844			0.79				75
Exercised		(1,500	)		0.79				345
Outstanding at June 30, 2023		5,435,572		$	1.64		7.27	$	1,102,624
Vested and exercisable at June 30, 2023		4,049,004		$	1.84		6.66	$	580,962

The weighted average grant date fair value of options granted during the six month period ended June 30, 2023 was $0.60 per share.

Performance Share Units:

On February 10, 2022, and on April 21, 2023, the Compensation Committee of the Board of Directors approved awards of performance share units to certain senior executives of the Company (the “2022 PSU” and the “2023 PSU”, respectively).

For performance share units, which are settled in stock, the number of shares earned is subject to both performance and time-based vesting. For the performance component, the number of shares earned is determined at the end of the periods based upon achievement of specified performance conditions such as the Company’s Adjusted EBITDA. When the performance criteria are met, the award is earned and vests assuming continued employment through the specified service period(s). Shares are issued from the Company’s 2018 Omnibus Equity Compensation Plan upon vesting. The number of 2023 PSU which could potentially be issued ranges from 0 up to a maximum of 1,250,000 of the target awards depending on the specified terms and conditions of the target award.

The fair value of performance share units is based on the fair market value of the Company’s common stock on the date of grant. The compensation expense associated with these awards is amortized on an accelerated basis over the vesting period based on the Company’s projected assessment of the level of performance that will be achieved and earned. In the event the Company determines it is no longer probable that the minimum performance criteria specified in the plan will be achieved, all previously recognized compensation expense is reversed in the period such a determination is made. The 2022 PSU were forfeited in April 2023 as the minimum performance component was not achieved. For the 2023 PSU, the Company determined it was probable that the minimum performance component would be met and accordingly commenced amortization in the quarter ended June 30, 2023. In April 2024, 1,250,000 shares of the 2023 PSU were earned as the performance criteria was met and 312,501 shares were vested.

Activity in performance share units for the six months ended June 30, 2024 and June 30, 2023 was as follows:

	Number of performance share units			Weighted average grant date fair value
Non- vested at January 1, 2024		1,250,000		$	0.78
Exercised/Released		(312,501	)		0.78
Non- vested at June 30, 2024		937,499		$	0.78
Non- vested at January 1, 2023		790,327		$	1.53
Granted		1,250,000			0.78
Forfeited/ unearned		(790,327	)		1.53
Non- vested at June 30, 2023		1,250,000		$	0.78

Capital Structure (Details) - Schedule of Outstanding Stock Warrants - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Schedule of Outstanding Stock Warrants [Line Items]
Common Stock Warrants Outstanding (in Shares)	2,255,184
Exercise Price 1.25 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.25
Common Stock Warrants Outstanding (in Shares)	1,055,184
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.25 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.25
Common Stock Warrants Outstanding (in Shares)	160,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.34 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.34
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.40 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.4
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.54 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.54
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.62 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.62
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.68 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.68
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.69 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.69
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.74 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.74
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.76 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.76
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.91 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.91
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 1.95 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 1.95
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 2.00 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 2.01 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.01
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 2.08 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.08
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 2.45 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.45
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 2.53 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.53
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 2.57 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.57
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 2.70 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.7
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	1 year	2 years
Exercise Price 2.78 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.78
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 2.79 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.79
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	1 year	2 years
Exercise Price 2.89 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.89
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	3 years	4 years
Exercise Price 2.93 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.93
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	2 years	2 years
Exercise Price 2.97 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 2.97
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	1 year	2 years
Exercise Price 3.09 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 3.09
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	3 years	3 years
Exercise Price 3.17 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 3.17
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	3 years	4 years
Exercise Price 3.19 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 3.19
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	1 year	2 years
Exercise Price 3.27 [Member]
Schedule of Outstanding Stock Warrants [Line Items]
Exercise Price (in Dollars per share)	$ 3.27
Common Stock Warrants Outstanding (in Shares)	40,000
Weighted Average Remaining Contractual Life	1 year	2 years

Equity Compensation Plans (Details) - Schedule of Activity in Performance Share Units - Performance share units [Member] - $ / shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Equity Compensation Plans (Details) - Schedule of Activity in Performance Share Units [Line Items]
Number of performance share units, Non- vested, Beginning	1,250,000	790,327
Weighted average grant date fair value, Non- vested, Beginning	$ 0.78	$ 1.53
Number of performance share units, Granted		1,250,000
Weighted average grant date fair value, Granted		$ 0.78
Number of performance share units, Forfeited/ unearned		(790,327)
Weighted average grant date fair value, Forfeited/ unearned		$ 1.53
Number of performance share units, Exercised/Released	(312,501)
Weighted average grant date fair value, Exercised/Released	$ 0.78
Number of performance share units, Non- vested, Ending	937,499	1,250,000
Weighted average grant date fair value, Non- vested, Ending	$ 0.78	$ 0.78

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($)	Series 1 Convertible Preferred Stock	Series 2 Convertible Preferred Stock	Common Stock	Treasury Stock	Additional Paid in Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2022	$ 851,660	$ 21,952,000	$ 2,176		$ 39,819,420	$ (31,590,583)	$ 31,034,673
Balance (in Shares) at Dec. 31, 2022	170,332	21,952	21,750,804
Provision for compensation expense related to stock-based compensation					420,748		420,748
Exercise of stock options into common stock					1,185		1,185
Exercise of stock options into common stock (in Shares)			1,500
Net loss						(230,215)	(230,215)
Balance at Mar. 31, 2023	$ 851,660	$ 21,952,000	$ 2,176		40,241,353	(31,820,798)	31,226,391
Balance (in Shares) at Mar. 31, 2023	170,332	21,952	21,752,304
Balance at Dec. 31, 2022	$ 851,660	$ 21,952,000	$ 2,176		39,819,420	(31,590,583)	$ 31,034,673
Balance (in Shares) at Dec. 31, 2022	170,332	21,952	21,750,804
Exercise of stock options into common stock (in Shares)							1,500
Net loss							$ (5,527,870)
Balance at Jun. 30, 2023	$ 851,660	$ 21,952,000	$ 2,176		41,602,734	(37,118,453)	27,290,117
Balance (in Shares) at Jun. 30, 2023	170,332	21,952	21,752,304
Balance at Mar. 31, 2023	$ 851,660	$ 21,952,000	$ 2,176		40,241,353	(31,820,798)	31,226,391
Balance (in Shares) at Mar. 31, 2023	170,332	21,952	21,752,304
Provision for compensation expense related to stock-based compensation					443,800		443,800
Extension of warrants					917,581		917,581
Net loss						(5,297,655)	(5,297,655)
Balance at Jun. 30, 2023	$ 851,660	$ 21,952,000	$ 2,176		41,602,734	(37,118,453)	27,290,117
Balance (in Shares) at Jun. 30, 2023	170,332	21,952	21,752,304
Balance at Dec. 31, 2023	$ 851,660	$ 21,952,000	$ 2,176	$ (166,757)	42,415,894	(35,824,200)	29,230,773
Balance (in Shares) at Dec. 31, 2023	170,332	21,952	21,752,304	164,029
Provision for compensation expense related to stock-based compensation					217,125		217,125
Purchases of treasury stock				$ (6,098)			(6,098)
Purchases of treasury stock (in Shares)				5,418
Net loss						(214,179)	(214,179)
Balance at Mar. 31, 2024	$ 851,660	$ 21,952,000	$ 2,176	$ (172,855)	42,633,019	(36,038,379)	29,227,621
Balance (in Shares) at Mar. 31, 2024	170,332	21,952	21,752,304	169,447
Balance at Dec. 31, 2023	$ 851,660	$ 21,952,000	$ 2,176	$ (166,757)	42,415,894	(35,824,200)	$ 29,230,773
Balance (in Shares) at Dec. 31, 2023	170,332	21,952	21,752,304	164,029
Exercise of stock options into common stock (in Shares)
Net loss							$ (1,817,238)
Balance at Jun. 30, 2024	$ 851,660	$ 21,952,000	$ 2,200	$ (367,563)	42,684,380	(37,641,438)	27,481,239
Balance (in Shares) at Jun. 30, 2024	170,332	21,952	21,988,711	346,258
Balance at Mar. 31, 2024	$ 851,660	$ 21,952,000	$ 2,176	$ (172,855)	42,633,019	(36,038,379)	29,227,621
Balance (in Shares) at Mar. 31, 2024	170,332	21,952	21,752,304	169,447
Provision for compensation expense related to stock-based compensation					154,873		154,873
Vesting of performance share units, net of share withheld for employee taxes			$ 24		(103,512)		(103,488)
Vesting of performance share units, net of share withheld for employee taxes (in Shares)			236,407
Purchases of treasury stock				$ (194,708)			(194,708)
Purchases of treasury stock (in Shares)				176,811
Net loss						(1,603,059)	(1,603,059)
Balance at Jun. 30, 2024	$ 851,660	$ 21,952,000	$ 2,200	$ (367,563)	$ 42,684,380	$ (37,641,438)	$ 27,481,239
Balance (in Shares) at Jun. 30, 2024	170,332	21,952	21,988,711	346,258

Capital Structure (Details) - USD ($)	3 Months Ended	6 Months Ended
Capital Structure (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2024	Dec. 31, 2023	Sep. 30, 2018
Capital Structure [Line Items]
Common stock price per share (in Dollars per share)		$ 23
Common stock, share authorized	40,000,000	40,000,000	40,000,000
Common stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001	$ 0.0001
Deferred debt cost (in Dollars)	$ 917,581	$ 917,581
Warrant expenses (in Dollars)	$ 917,581	$ 917,581
Warrant [Member]
Capital Structure [Line Items]
Warrants exercisable				1,055,184
Exercise price (in Dollars per share)				$ 1.25
Issuance of warrants		1,200,000
Number of warrants	840,000	840,000
Series 1 Convertible Preferred Stock [Member]
Capital Structure [Line Items]
Preferred stock, shares authorized	250,000	250,000	250,000
Preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares designated	250,000	250,000
Convertible preferred stock	1.3223	1.3223
Convertible preferred stock, shares outstanding	170,332	170,332	170,332
Convertible preferred stock, shares issued upon conversion	225,231	225,231
Series 2 Convertible Preferred Stock [Member]
Capital Structure [Line Items]
Preferred stock, shares authorized	25,000	25,000	25,000
Preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares designated	25,000	25,000
Convertible preferred stock, shares outstanding	21,952	21,952	21,952
Convertible preferred stock, shares issued upon conversion	20,000	20,000
Gross proceeds (in Dollars)		$ 20,000,000
Additional sale of shares		1,952
Accrue dividends stated value (in Dollars)		$ 1,000
Annual rate		10.00%
Cumulative accrued dividends (in Dollars)	$ 25,349,212	$ 25,349,212
Preferred stock conversion into common stock, shares		266
Series 2 Convertible Preferred Stock [Member] \| Investor [Member]
Capital Structure [Line Items]
Gross proceeds (in Dollars)		$ 1,950,000
Preferred Stock [Member]
Capital Structure [Line Items]
Preferred stock, shares authorized	500,000	500,000
Preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001

Property and Equipment (Details) - USD ($)	3 Months Ended		6 Months Ended
Property and Equipment (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Property and Equipment [Line Items]
Depreciation and amortization expense	$ 1,561,352	$ 1,207,069	$ 3,097,061	$ 2,370,418

Intangible Assets (Details) - Schedule of Intangible Assets - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Schedule of Intangible Assets [Line Items]
Gross Carrying Amount	$ 15,338,654	$ 15,338,654
Accumulated Amortization	(2,832,109)	(1,947,349)
Net Carrying Amount	$ 12,506,545	$ 13,391,305
Patent [Member]
Schedule of Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years
Gross Carrying Amount	$ 30,760	$ 30,760
Accumulated Amortization	(30,760)	(30,760)
Net Carrying Amount
Franchisee contract-based agreements [Member]
Schedule of Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years
Gross Carrying Amount	$ 12,744,367	$ 12,744,367
Accumulated Amortization	(2,017,840)	(1,380,638)
Net Carrying Amount	$ 10,726,527	$ 11,363,729
Liberty Loan brand [Member]
Schedule of Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years
Gross Carrying Amount	$ 340,218	$ 340,218
Accumulated Amortization	(53,823)	(36,855)
Net Carrying Amount	$ 286,395	$ 303,363
Non-compete agreements [Member]
Schedule of Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years
Gross Carrying Amount	$ 86,113	$ 86,113
Accumulated Amortization	(13,752)	(9,334)
Net Carrying Amount	$ 72,361	$ 76,779
Non contractual customer relationships [Member]
Schedule of Intangible Assets [Line Items]
Estimated Useful Life	5 years	5 years
Gross Carrying Amount	$ 1,952,371	$ 1,952,371
Accumulated Amortization	(618,396)	(423,020)
Net Carrying Amount	$ 1,333,975	$ 1,529,351
Customer list [Member]
Schedule of Intangible Assets [Line Items]
Estimated Useful Life	3 years	3 years
Gross Carrying Amount	$ 184,825	$ 184,825
Accumulated Amortization	(97,538)	(66,742)
Net Carrying Amount	$ 87,287	$ 118,083

Summary of Significant Accounting Policies (Details) - Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis - Carrying Amount [Member] - USD ($)

Jun. 30, 2024

Dec. 31, 2023

Schedule of Fair Value Assets measured on Recurring Basis [Line Items]

Loan receivables at fair value

^[1]

$ 48,618,482

$ 48,076,705

Level 1 [Member]

Schedule of Fair Value Assets measured on Recurring Basis [Line Items]

Loan receivables at fair value

^[1]

Level 2 [Member]

Schedule of Fair Value Assets measured on Recurring Basis [Line Items]

Loan receivables at fair value

^[1]

Level 3 [Member]

Schedule of Fair Value Assets measured on Recurring Basis [Line Items]

Loan receivables at fair value

^[1]

$ 40,085,656

$ 35,794,290

[1]

Intangible Assets (Details) - USD ($)	3 Months Ended		6 Months Ended
Intangible Assets (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Intangible Assets [Abstract]
Intangible assets	$ 442,426	$ 443,059	$ 884,760	$ 886,118

Equity Compensation Plans (Details) - Schedule of Activity in Stock Option - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Schedule of Activity in Stock Option [Line Items]
Outstanding, Number of options, beginning	4,452,447	3,919,228
Outstanding, Weighted average exercise price, beginning (in Dollars per share)	$ 1.57	$ 1.97
Outstanding, Aggregate intrinsic value, beginning (in Dollars)	$ 2,152,602	$ 52,223
Granted, Number of options		1,517,844
Granted, Weighted average exercise price (in Dollars per share)		$ 0.79
Granted, Aggregate intrinsic value (in Dollars)		$ 75
Exercised/Released, Number of options		(1,500)
Exercised/Released, Weighted average exercise price (in Dollars per share)		$ 0.79
Exercised/Released, Aggregate intrinsic value (in Dollars)		$ 345
Expired, Number of options	(55,000)
Expired, Weighted average exercise price (in Dollars per share)	$ 8
Expired, Aggregate intrinsic value (in Dollars)
Outstanding, Number of options, ending	4,397,447	5,435,572
Outstanding, Weighted average exercise price, ending (in Dollars per share)	$ 1.49	$ 1.64
Outstanding at Weighted average contractual term (years), ending	6 years 11 months 4 days	7 years 3 months 7 days
Outstanding, Aggregate intrinsic value, ending (in Dollars)	$ 1,118,281	$ 1,102,624
Vested and exercisable, Number of options	3,661,778	4,049,004
Vested and exercisable, Weighted average exercise price (in Dollars per share)	$ 1.56	$ 1.84
Vested and exercisable, Weighted average contractual term (years)	6 years 8 months 15 days	6 years 7 months 28 days
Vested and exercisable, Aggregate intrinsic value (in Dollars)	$ 855,491	$ 580,962

Summary of Significant Accounting Policies (Details) - Schedule of Lessor Revenues and Fees - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Schedule of Lease Revenues and Fees [Abstract]
Lease billings and accruals	$ 34,686,893	$ 32,501,656	$ 69,971,769	$ 66,756,740
Provision for doubtful accounts	(7,806,427)	(10,847,413)	(17,290,476)	(22,085,828)
Gain on sale of lease receivables	28,525	1,252,600	61,434	2,950,089
Lease placement collections	165,057		165,057
Lease revenues and fees	$ 27,074,048	$ 22,906,843	$ 52,907,784	$ 47,621,001

Loan Payable Under Credit Agreement

6 Months Ended

Jun. 30, 2024

Loan Payable Under Credit Agreement [Abstract]

LOAN PAYABLE UNDER CREDIT AGREEMENT

8. LOAN PAYABLE UNDER CREDIT AGREEMENT

On March 6, 2015, FlexShopper, through a wholly-owned subsidiary (“Borrower”), entered into a credit agreement (as amended from time-to-time, the “Credit Agreement”) with Wells Fargo Bank, National Association as paying agent, various lenders from time to time party thereto and WE 2014-1, LLC, an affiliate of Waterfall Asset Management, LLC, as administrative agent and lender (“Lender”). On September 2022, WE 2014-1, LLC assigned 100% of its Commitments and all Loans to Powerscourt Investments 32, LP, an affiliate of Waterfall Asset Management, LLC. The interest rate charged on amounts borrowed was SOFR plus 11% per annum. The Commitment Termination Date was April 1, 2024.

On March 27, 2024, the Company refinanced all the obligations under the Credit Agreement owed to the Administrative Agent and the Lenders, and all liens held by any of the Lenders, or the Administrative Agent were discharged and released. The Administrative Agent, the Lenders and the Company terminated the Credit Agreement.

On March 27, 2024, FlexShopper, through a wholly-owned subsidiary (“Borrower”), entered into a new credit agreement (the “2024 Credit Agreement”) with Computershare Trust Company, National Association as paying agent, various lenders from time to time party thereto and Powerscourt Investment 50, LP, an affiliate of Waterfall Asset Management, LLC, as administrative agent and lender (“Lender”). The Borrower is permitted to borrow funds under the 2024 Credit Agreement based on FlexShopper’s cash on hand and the Amortized Order Value of its Eligible Leases (as such terms are defined in the 2024 Credit Agreement) less certain deductions described in the 2024 Credit Agreement. Under the terms of the 2024 Credit Agreement, subject to the satisfaction of certain conditions, the Borrower may borrow up to $150,000,000 from the Lender until the Commitment Termination Date and must repay all borrowed amounts one year thereafter, on the date that is 12 months following the Commitment Termination Date (unless such amounts become due or payable on an earlier date pursuant to the terms of the Credit Agreement). The Commitment Termination Date is April 1, 2026. The Lender was granted a security interest in certain leases and loans as collateral under this Agreement. The interest rate charged on amounts borrowed is SOFR plus 9% per annum. The Company will pay the Lender a fee in an amount equal to 1% of the aggregate Commitments as of March 27, 2024, payable in 12 monthly installments on each interest payment date commencing April 2024. At June 30, 2024, amounts borrowed bear interest at 14.44%.

The 2024 Credit Agreement provides that FlexShopper may not incur additional indebtedness (other than expressly permitted indebtedness) without the permission of the Lender, and also prohibits payments of cash dividends on common stock. Additionally, the 2024 Credit Agreement includes covenants requiring FlexShopper to maintain a minimum amount of Equity Book Value, Liquidity and Cash, and maintain a certain ratio of Consolidated Total Debt to Equity Book Value (each capitalized term, as defined in the 2024 Credit Agreement). Upon a Permitted Change of Control, FlexShopper must refinance the debt under the 2024 Credit Agreement, subject to the payment of an early termination fee. A summary of the covenant requirements, and FlexShopper’s actual results at June 30, 2024, follows:

	June 30, 2024
	Required Covenant		Actual Position
Equity Book Value not less than	$	16,452,246	$	27,481,239
Liquidity greater than		3,500,000		10,346,383
Cash greater than		2,500,000		4,892,912
Consolidated Total Debt to Equity Book Value ratio not to exceed		5.25		4.72

The 2024 Credit Agreement includes customary events of default, including, among others, failures to make payment of principal and interest, breaches or defaults under the terms of the 2024 Credit Agreement and related agreements entered into with the Lender, breaches of representations, warranties or certifications made by or on behalf of FlexShopper in the 2024 Credit Agreement and related documents (including certain financial and expense covenants), deficiencies in the borrowing base, certain judgments against FlexShopper and bankruptcy events.

The Company borrowed under the Credit Agreement $11,750,000 and $22,361,690 for the three and six months ended June 30, 2024, respectively, and $0 and $2,750,000 for the three and six months ended June 30, 2023, respectively. The Company repaid under the Credit Agreement and $0 and $0 for the three and six months ended June 30, 2024, respectively, and $220,000 and $2,795,000 for the three and six months ended June 30, 2023, respectively.

Interest expense incurred under the Credit Agreement amounted to $4,137,318 and $8,422,665 for the three and six months ended June 30, 2024, respectively, and $3,332,686 and $6,611,523 for the three and six months ended June 30, 2023, respectively. The outstanding balance under the Credit Agreement was $118,816,690 as of June 30, 2024 and was $96,455,000 as of December 31, 2023. Such amount is presented in the condensed consolidated balance sheets net of unamortized issuance costs of $1,332,712 and $70,780 as of June 30, 2024 and December 31, 2023, respectively. Interest is payable monthly on the outstanding balance of the amounts borrowed. No principal is expected to be repaid in the next twelve months due to the Commitment Termination Date having been extended to April 1, 2026, or from reductions in the borrowing base. The Company must repay all borrowed amounts one year after the Commitment Termination Date. Accordingly, all principal is shown as a non-current liability at June 30, 2024.

Equity Compensation Plans (Details) - USD ($)	3 Months Ended		6 Months Ended
Equity Compensation Plans (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Equity Compensation Plans [Line Items]
Compensation expense	$ 154,873	$ 443,800	$ 371,998	$ 864,548
Weighted average grant date fair value of options granted				$ 0.6
Potentially be issued shares			13,661,056	15,011,682
Equity Option [Member]
Equity Compensation Plans [Line Items]
Shares remained available for issuance	2,150,000		2,150,000
Compensation expense	$ 80,463	384,396	$ 160,907	$ 805,144
Performance Shares [Member]
Equity Compensation Plans [Line Items]
Compensation expense	74,410	$ 59,404	211,091	$ 59,404
Unrecognized compensation cost related to non-vested options	$ 809,543		$ 809,543
Weighted average period			1 year 10 months 2 days
Weighted average grant date fair value of options granted				$ 0.78
Earned shares			1,250,000
Vested shares			312,501
Minimum [Member] \| Performance Shares [Member]
Equity Compensation Plans [Line Items]
Potentially be issued shares			0
Maximum [Member] \| Performance Shares [Member]
Equity Compensation Plans [Line Items]
Potentially be issued shares			1,250,000

Basepoint Credit Agreement (Details)	3 Months Ended	6 Months Ended
Basepoint Credit Agreement (Details)	Jun. 30, 2024 USD ($)	Jun. 30, 2024 USD ($)
Basepoint Credit Agreement [Line Items]
Agreement due date		Jun. 07, 2026
Borrowing rate		5.00%
Basepoint Credit Agreement [Member]
Basepoint Credit Agreement [Line Items]
Origination consumer loan		$ 20,000,000
Annual interest rate	13.42%	13.42%
Borrowing rate		10.00%
Current borrowing value	$ 2,000,000	$ 2,000,000
Interest expense incurred	251,614	503,501
Outstanding balance credit agreement	7,412,605	7,412,605
Unamortized issuance costs	$ 73,730	$ 73,730

Intangible Assets (Details) - Schedule of Future Estimated Amortization Expense	Jun. 30, 2024 USD ($)
Schedule of Future Estimated Amortization Expense [Abstract]
2024 (six months remaining)	$ 884,580
2025	1,764,026
2026	1,707,552
2027	1,675,012
2028	1,317,072
Total	$ 7,348,242

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2024	Dec. 31, 2023
CURRENT ASSETS:
Cash	$ 4,892,912	$ 4,413,130
Lease receivables, net	57,151,127	44,795,090
Loan receivables at fair value	40,085,656	35,794,290
Prepaid expenses and other assets	4,452,164	3,300,677
Lease merchandise, net	25,856,542	29,131,440
Total current assets	132,438,401	117,434,627
Property and equipment, net	9,419,105	9,308,859
Right of use asset, net	1,142,104	1,237,010
Intangible assets, net	12,506,545	13,391,305
Other assets, net	2,459,908	2,175,215
Deferred tax asset, net	14,246,325	12,943,361
Total assets	172,212,388	156,490,377
CURRENT LIABILITIES:
Accounts payable	3,811,310	7,139,848
Accrued payroll and related taxes	381,929	578,197
Accrued expenses	3,763,725	3,972,397
Lease liability - current portion	263,111	245,052
Total current liabilities	8,394,171	12,134,118
Loan payable under credit agreement to beneficial shareholder, net of unamortized issuance costs of $1,332,712 at June 30, 2024 and $70,780 at December 31, 2023	117,483,978	96,384,220
Loan payable under Basepoint credit agreement, net of unamortized issuance costs of $73,730 at June 30, 2024 and $92,964 at December 31, 2023	7,338,875	7,319,641
Lease liabilities, net of current portion	1,184,683	1,321,578
Total liabilities	144,731,149	127,259,604
STOCKHOLDERS’ EQUITY
Common stock, $0.0001 par value - authorized 40,000,000 shares, issued 21,988,711 shares at June 30, 2024 and 21,752,304 shares at December 31, 2023	2,200	2,176
Treasury shares, at cost- 346,258 shares at June 30, 2024 and 164,029 shares at December 31, 2023	(367,563)	(166,757)
Additional paid in capital	42,684,380	42,415,894
Accumulated deficit	(37,641,438)	(35,824,200)
Total stockholders’ equity	27,481,239	29,230,773
Total liabilities and stockholders' equity	172,212,388	156,490,377
Related Party
CURRENT LIABILITIES:
Promissory notes to related parties, including accrued interest	174,096	198,624
Promissory notes to related parties, net of unamortized issuance costs of $420,558 at June 30, 2024 and $649,953 at December 31, 2023 and net of current portion	10,329,442	10,100,047
Series 1 Convertible Preferred Stock
STOCKHOLDERS’ EQUITY
Convertible preferred stock value	851,660	851,660
Series 2 Convertible Preferred Stock
STOCKHOLDERS’ EQUITY
Convertible preferred stock value	$ 21,952,000	$ 21,952,000

Capital Structure

6 Months Ended

Jun. 30, 2024

Capital Structure [Abstract]

CAPITAL STRUCTURE

9. CAPITAL STRUCTURE

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

Preferred Stock

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

●

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

As of June 30, 2024, each share of Series 1 Convertible Preferred Stock was convertible into 1.32230 shares of the Company’s common stock, subject to certain anti-dilution rights. The holders of the Series 1 Convertible Preferred Stock have the option to convert the shares to common stock at any time. Upon conversion, all accumulated and unpaid dividends, if any, will be paid as additional shares of common stock. The holders of Series 1 Convertible Preferred Stock have the same dividend rights as holders of common stock, as if the Series 1 Convertible Preferred Stock had been converted to common stock.

As of June 30, 2024, there were 170,332 shares of Series 1 Convertible Preferred Stock outstanding, which were convertible into 225,231 shares of common stock.

●

Series 2 Convertible Preferred Stock – The 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 June 30, 2024 totaled $25,349,212. As of June 30, 2024, each Series 2 Preferred Share was convertible into approximately 266 shares of common stock; however, the conversion rate is subject to further increase pursuant to a weighted average anti-dilution provision. The holders of the Series 2 Preferred Stock have the option to convert such shares into shares of common stock and have the right to vote with holders of common stock on an as-converted basis. If the average closing price during any 45-day consecutive trading day period or change of control transaction values the common stock at a price equal to or greater than $23.00 per share, then conversion shall be automatic. Upon a Liquidation Event or Deemed Liquidation Event (each as defined), holders of Series 2 Preferred Stock shall be entitled to receive out of the assets of the Company prior to and in preference to the common stock and Series 1 Convertible Preferred Stock an amount equal to the greater of (1) the Stated Value, plus any accrued and unpaid dividends thereon, and (2) the amount per share as would have been payable had all shares of Series 2 Preferred Stock been converted to common stock immediately before the Liquidation Event or Deemed Liquidation Event.

As the dividends for the Series 2 Preferred Shares have not been declared by the Company’s Board of Directors, there is no dividends accrual reflected in the Company’s Consolidated Financial Statement. The Series 2 Preferred Shares dividends is reflected on the Consolidated Statement of Operations for purposes of determining the net income attributable to common and Series 1 Convertible Preferred shareholders.

Common Stock

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

Warrants

In September 2018, the Company issued warrants exercisable for an aggregate 1,055,184 shares of common stock at an exercise price of $1.25 per warrant to Mr. Heiser and NRNS in connection with partial conversions of their promissory notes (the “Conversion Warrants”). The original expiration date of these warrants was September 28, 2023 (and extended as described below).

From January 2019 to August 2021, the Company issued to PITA Holdings, LLC (“PITA”) Common Stock Purchase Warrants (the “Consulting Warrants”) to purchase up to an aggregate of 1,200,000 shares of the Company’s common stock in connection with that certain Consulting Agreement, dated as of February 19, 2019 (as may be amended from time to time), between the Company and XLR8 Capital Partners LLC (“XLR8”).

PITA, NRNS and XLR8 are affiliates of the Company.

On June 29, 2023, the Company, FlexShopper, LLC, NRNS, Mr. Heiser and PITA entered into an Amendment to Subordinated Debt and Warrants to Purchase Common Stock (the “Amendment”), pursuant to which, among other things, the parties agreed to extend the maturity date of the NRNS Note from July 1, 2024 to July 1, 2025. In order to induce NRNS to enter into the Amendment, the expiration date of the Conversion Warrants and the expiration date date of 840,000 of the Consulting Warrants was extended 30 months from the original expiration date. The cost of the warrant modification was $917,581 and was recorded as a deferred debt cost of NRNS note.

There was expense related to warrants during the three and six months ended June 30, 2024, and the expense related to warrants was $917,581 and $917,581 for the three and six months ended June 30, 2023, respectively.

The following table summarizes information about outstanding stock warrants as of June 30, 2024 and December 31, 2023, all of which are exercisable:

Exercise		Common Stock Warrants		Weighted Average Remaining Contractual Life
Price		Outstanding		June 30, 2024	Dec 31, 2023
$	1.25		1,055,184	2 years	2 years
$	1.25		160,000	2 years	2 years
$	1.34		40,000	2 years	2 years
$	1.40		40,000	2 years	2 years
$	1.54		40,000	2 years	2 years
$	1.62		40,000	2 years	2 years
$	1.68		40,000	2 years	2 years
$	1.69		40,000	2 years	2 years
$	1.74		40,000	2 years	2 years
$	1.76		40,000	2 years	2 years
$	1.91		40,000	2 years	2 years
$	1.95		40,000	2 years	2 years
$	2.00		40,000	2 years	2 years
$	2.01		40,000	2 years	2 years
$	2.08		40,000	2 years	2 years
$	2.45		40,000	2 years	2 years
$	2.53		40,000	2 years	2 years
$	2.57		40,000	2 years	2 years
$	2.70		40,000	1 years	2 years
$	2.78		40,000	2 years	2 years
$	2.79		40,000	1 years	2 years
$	2.89		40,000	3 years	4 years
$	2.93		40,000	2 years	2 years
$	2.97		40,000	1 years	2 years
$	3.09		40,000	3 years	3 years
$	3.17		40,000	3 years	4 years
$	3.19		40,000	1 years	2 years
$	3.27		40,000	1 years	2 years
			2,255,184

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
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+ Details

Leases (Details) - Schedule of Undiscounted Operating Lease Liabilities	Jun. 30, 2024 USD ($)
Schedule of Undiscounted Operating Lease Liabilities [Abstract]
2024	$ 217,197
2025	443,038
2026	456,330
2027	470,019
2028 and thereafter	303,574
Total undiscounted cash flows	1,890,158
Less: interest	(442,371)
Present value of lease liabilities	$ 1,447,787

Leases (Details) - Schedule of Undiscounted Finance Lease Liabilities	Jun. 30, 2024 USD ($)
Schedule of Undiscounted Finance Lease Liabilities [Abstract]
2024	$ 7
Total undiscounted cash flows	7
Less: interest
Present value of lease liabilities	$ 7

Promissory Notes-Related Parties (Details) - Schedule of Amounts Payable Under the Promissory Notes - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
2024 [Member]
Schedule of Amounts Payable Under the Promissory Notes [Line Items]
Promissory note		$ 174,096
2025 [Member]
Schedule of Amounts Payable Under the Promissory Notes [Line Items]
Promissory note	$ 10,750,000

Intangible Assets

6 Months Ended

Jun. 30, 2024

Intangible Assets [Abstract]

INTANGIBLE ASSETS

6. INTANGIBLE ASSETS

The following table provides a summary of our intangible assets:

	June 30, 2024
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patent	10 years	$	30,760	$	(30,760	)	$	-
Franchisee contract-based agreements	10 years		12,744,367		(2,017,840	)		10,726,527
Liberty Loan brand	10 years		340,218		(53,823	)		286,395
Non-compete agreements	10 years		86,113		(13,752	)		72,361
Non contractual customer relationships	5 years		1,952,371		(618,396	)		1,333,975
Customer list	3 years		184,825		(97,538	)		87,287
		$	15,338,654	$	(2,832,109	)	$	12,506,545

	December 31, 2023
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patent	10 years	$	30,760	$	(30,760	)	$	-
Franchisee contract-based agreements	10 years		12,744,367		(1,380,638	)		11,363,729
Liberty Loan brand	10 years		340,218		(36,855	)		303,363
Non-compete agreements	10 years		86,113		(9,334	)		76,779
Non contractual customer relationships	5 years		1,952,371		(423,020	)		1,529,351
Customer list	3 years		184,825		(66,742	)		118,083
		$	15,338,654	$	(1,947,349	)	$	13,391,305

Depreciation and amortization expense for intangible assets was $442,426 and $884,760 for the three and six months ended June 30, 2024, respectively, and $443,059 and $886,118 for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following table:

	Amortization Expense
2024 (six months remaining)		884,580
2025		1,764,026
2026		1,707,552
2027		1,675,012
2028		1,317,072
Total	$	7,348,242

Income Taxes

6 Months Ended

Jun. 30, 2024

Income Taxes [Abstract]

INCOME TAXES

11. INCOME TAXES

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

The Company’s effective income tax rate for the three months ended June 30, 2024 was approximately 41.76%. This was different than the expected federal income tax rate of 21% primarily due to the impact of non-deductible expenses, equity compensation and state income taxes.

The realization of the deferred tax asset as of June 30, 2024 is more likely than not based on the Company’s projected taxable income.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
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-Section 50
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

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+ Details