UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
| (Exact Name of Registrant as Specified in Charter) |
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code:
(
| (Former Name or Former Address, if Changed Since Last Report) |
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
CURRENT REPORT ON FORM 8-K
FlexShopper, Inc. (the “Company”)
November 14, 2024
Item 2.02. Results of Operations and Financial Condition.
FlexShopper, Inc. (Nasdaq:FPAY) (“FlexShopper”), a leading national online lease-to-own (“LTO”) retailer and payment solution provider for underserved consumes, today announced its financial results for the quarter ended September 30, 2024. A copy of the press release is furnished with this report as Exhibit 99.1. Such information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
| (a) | Exhibits. The exhibit listed in the following Exhibit Index is filed as part of this current report. |
| Exhibit No. | Description | |
| 99.1 | Press Release issued by FlexShopper, Inc. on November 14, 2024. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FLEXSHOPPER, INC. | ||
| Date: November 19, 2024 | By: | /s/ H. Russell Heiser Jr. |
| H. Russell Heiser Jr. | ||
| Chief Executive Officer | ||
2
Exhibit 99.1
 |
NEWS RELEASE |
FlexShopper, Inc. Reports Record
2024 Third-Quarter Financial Results
Strategic transformation produced record quarterly
total revenue of $38.6 million,
with earnings increasing to $0.05 per diluted share for the third quarter of 2024
Adjusted EBITDA increased 45% year-over-year to a quarterly record of $12.2 million
Boca Raton, Fla., -- November 14, 2024 -- FlexShopper, Inc. (Nasdaq: FPAY) (“FlexShopper”), a leading national online lease-to-own (“LTO”) retailer and payment solution provider for underserved consumers, today announced its financial results for the quarter ended September 30, 2024.
Russ Heiser, Jr, Chief Executive Officer, stated, “2024 is shaping up to be a transformative year for FlexShopper as the strategies we are pursuing to profitably grow our business take hold and more retail partners and consumers recognize the value of our unique payment solutions. We are successfully adding new retail partners, and to date, have expanded our signed store count to over 7,800 retail locations – a nearly 250% increase since the beginning of the year. In addition, we continue to grow retail revenue and gross margin through our FlexShopper.com marketplace.”
Mr. Heiser continued, “As we pursue multiple growth initiatives, we remain focused on managing risk, improving customer performance, and attracting higher credit quality customers. As a result, the provision for doubtful accounts as a percentage of gross lease billings was 22% for the third quarter of 2024, a 1,000-basis point improvement over the prior year period. Strong payment performance, combined with the benefits of our strategic plan, are driving significant improvements in profitability, and I am encouraged by the return to GAAP net income, as well as the 45% increase in adjusted EBITDA during the third quarter of 2024.”
“We continue to follow strategies to profitably grow our business, while pursuing multiple corporate actions that we believe have the potential to create significant value for our shareholders. This includes the patent infringement lawsuits we filed initially against two of our competitors in which we expect a favorable outcome. In addition, we are working to complete our previously announced accretive rights offering to reduce our cost of capital and pursue the opportunity to redeem 91% of our Series 2 Preferred Stock at a 50+% discount to its liquidation preference. Overall, we believe tailwinds from the growth strategies we are pursuing will continue to support our business in 2025 and beyond, while we simultaneously pursue opportunities to create lasting value for our shareholders,” concluded Mr. Heiser.
Results for the Third Quarter Ended September 30, 2024, vs. the Third Quarter Ended September 30, 2023:
| ● | Total lease funding approvals increased 111.2% to $122.2 million from $57.9 million |
| ● | Total revenues increased 22.9% to $38.6 million from $31.4 million |
| ● | Gross profit increased 32.9% to $22.5 million from $16.9 million |
| ● | Gross profit margin increased 400 basis points to 58% from 54% |
| ● | Adjusted EBITDA(1) increased by 44.9% to $12.2 million from $8.4 million |
| ● | Operating income of $9.6 million, compared with operating income of $6.0 million |
| ● | Net income attributable to common stockholders of $1.2 million, or $0.05 per diluted share, compared to net loss attributable to common stockholders of ($129,000), or ($0.01) per diluted share |
Results for the Nine Months Ended September 30, 2024, vs. the Nine Months Ended September 30, 2023:
| ● | Total lease funding approvals increased 88.5% to $240.4 million from $127.5 million |
| ● | Total revenues increased 20.3% to $104.3 million from $86.7 million |
| ● | Gross profit increased 44.6% to $56.3 million from $38.9 million |
| ● | Gross profit margin increased 900 basis points to 54% from 45% |
| ● | Adjusted EBITDA(1) increased 63.4% to $24.6 million, compared to $15.1 million |
| ● | Operating income of $17.0 million, compared with operating income of $8.1 million |
| ● | Net loss attributable to common stockholders of ($2.8) million, or ($0.13) per diluted share, compared to net loss attributable to common stockholders of ($7.6) million, or ($0.35) per diluted share |
| (1) | Adjusted EBITDA is a non-GAAP financial measure. Refer to the definition and reconciliation of this measure under “Non-GAAP Measures”. |
Conference Call and Webcast Details
Conference Call Information:
Date: November 14, 2024
Time: 8:30 a.m. Eastern Time
Toll Free Dial In: (877) 407-2988
International Dial In: (201) 389-0923
Conference ID: 13749662
Webcast Link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=L7CNW8vm
The call will also be simultaneously webcast over the Internet via the “Investor” section of the Company’s website at https://investors.flexshopper.com/.
An audio replay of the call will be archived on the Company’s website at https://investors.flexshopper.com/.
About FlexShopper
FlexShopper, Inc. is a leading national financial technology company that offers innovative payment options to consumers. FlexShopper provides a variety of flexible funding options for underserved consumers through its direct-to-consumer online marketplace at Flexshopper.com and in partnership with merchants both online and at brick-and-mortar locations. FlexShopper’s solutions are crafted to meet the needs of a wide range of consumer segments through lease-to-own and lending products.
Forward-Looking Statements
All statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “could,” “seek,” “intend,” “plan,” “goal,” “estimate,” “anticipate,” or other comparable terms. Examples of forward-looking statements include, among others, statements we make regarding expectations of lease originations, the expansion of our lease-to-own program; expectations concerning our partnerships with retail partners; investments in, and the success of, our underwriting technology and risk analytics platform; our ability to collect payments due from customers; expected future operating results and expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including, among others, the following: our ability to obtain adequate financing to fund our business operations in the future; the failure to successfully manage and grow our FlexShopper.com e-commerce platform; our ability to maintain compliance with financial covenants under our credit agreement; our dependence on the success of our third-party retail partners and our continued relationships with them; our compliance with various federal, state and local laws and regulations, including those related to consumer protection; the failure to protect the integrity and security of customer and employee information; and the other risks and uncertainties described in the Risk Factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. The forward-looking statements made in this release speak only as of the date of this release, and FlexShopper assumes no obligation to update any such forward-looking statements to reflect actual results or changes in expectations, except as otherwise required by law.
2
FLEXSHOPPER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues: | ||||||||||||||||
| Lease revenues and fees, net | $ | 28,364,190 | $ | 21,082,199 | $ | 81,271,973 | $ | 68,703,201 | ||||||||
| Loan revenues and fees, net of changes in fair value | 9,047,165 | 10,304,247 | 19,692,817 | 18,001,057 | ||||||||||||
| Retail revenues | 1,177,146 | - | 3,327,468 | - | ||||||||||||
| Total revenues | 38,588,501 | 31,386,446 | 104,292,258 | 86,704,258 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Depreciation and impairment of lease merchandise | 14,486,564 | 13,061,958 | 43,021,351 | 42,893,163 | ||||||||||||
| Loan origination costs and fees | 677,913 | 1,389,107 | 2,395,780 | 4,878,158 | ||||||||||||
| Cost of retail revenues | 923,203 | - | 2,593,505 | - | ||||||||||||
| Marketing | 2,005,559 | 1,671,137 | 6,316,945 | 4,258,904 | ||||||||||||
| Salaries and benefits | 4,049,422 | 3,231,100 | 12,357,955 | 8,933,998 | ||||||||||||
| Operating expenses | 6,888,348 | 6,080,725 | 20,628,182 | 17,666,366 | ||||||||||||
| Total costs and expenses | 29,031,009 | 25,434,027 | 87,313,718 | 78,630,589 | ||||||||||||
| Operating income | 9,557,492 | 5,952,419 | 16,978,540 | 8,073,669 | ||||||||||||
| Interest expense including amortization of debt issuance costs | (5,672,594 | ) | (4,746,801 | ) | (16,213,843 | ) | (13,846,685 | ) | ||||||||
| Income/ (loss) before income taxes | 3,884,898 | 1,205,618 | 764,697 | (5,773,016 | ) | |||||||||||
| Income taxes (expense)/ benefit | (1,518,514 | ) | (265,517 | ) | (215,550 | ) | 1,185,247 | |||||||||
| Net income/ (loss) | 2,366,384 | 940,101 | 549,147 | (4,587,769 | ) | |||||||||||
| Dividends on Series 2 Convertible Preferred Shares | (1,176,402 | ) | (1,069,456 | ) | (3,337,600 | ) | (3,034,182 | ) | ||||||||
| Net income/ (loss) attributable to common and Series 1 Convertible Preferred shareholders | $ | 1,189,982 | $ | (129,355 | ) | $ | (2,788,453 | ) | $ | (7,621,951 | ) | |||||
| Basic and diluted income/ (loss) per common share: | ||||||||||||||||
| Basic | $ | 0.05 | $ | (0.01 | ) | $ | (0.13 | ) | $ | (0.35 | ) | |||||
| Diluted | $ | 0.05 | $ | (0.01 | ) | $ | (0.13 | ) | $ | (0.35 | ) | |||||
| WEIGHTED AVERAGE COMMON SHARES: | ||||||||||||||||
| Basic | 21,586,935 | 21,716,852 | 21,547,702 | 21,740,027 | ||||||||||||
| Diluted | 22,231,788 | 21,716,852 | 21,547,702 | 21,740,027 | ||||||||||||
3
FLEXSHOPPER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 7,330,542 | $ | 4,413,130 | ||||
| Lease receivables, net | 66,181,471 | 44,795,090 | ||||||
| Loan receivables at fair value | $ | 47,116,140 | 35,794,290 | |||||
| Prepaid expenses and other assets | 4,583,392 | 3,300,677 | ||||||
| Lease merchandise, net | $ | 24,087,010 | 29,131,440 | |||||
| Total current assets | 149,298,555 | 117,434,627 | ||||||
| Property and equipment, net | 9,495,192 | 9,308,859 | ||||||
| Right of use asset, net | 1,093,551 | 1,237,010 | ||||||
| Intangible assets, net | 12,064,118 | 13,391,305 | ||||||
| Other assets, net | 2,528,397 | 2,175,215 | ||||||
| Deferred tax asset, net | 12,781,946 | 12,943,361 | ||||||
| Total assets | $ | 187,261,759 | $ | 156,490,377 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 3,604,816 | $ | 7,139,848 | ||||
| Accrued payroll and related taxes | 744,371 | 578,197 | ||||||
| Promissory notes to related parties, including accrued interest | 10,616,988 | 198,624 | ||||||
| Accrued expenses | 3,477,386 | 3,972,397 | ||||||
| Lease liability - current portion | 275,029 | 245,052 | ||||||
| Total current liabilities | 18,718,590 | 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 | 130,274,365 | 96,384,220 | ||||||
| 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 | — | 10,100,047 | ||||||
| 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 | 7,348,492 | 7,319,641 | ||||||
| Lease liabilities, net of current portion | 1,111,740 | 1,321,578 | ||||||
| Total liabilities | 157,453,187 | 127,259,604 | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Series 1 Convertible Preferred Stock, $0.001 par value - authorized 250,000 shares, issued and outstanding 170,332 shares at $5.00 stated value | 851,660 | 851,660 | ||||||
| Series 2 Convertible Preferred Stock, $0.001 par value - authorized 25,000 shares, issued and outstanding 21,952 shares at $1,000 stated value | 21,952,000 | 21,952,000 | ||||||
| Common stock, $0.0001 par value - authorized 40,000,000 shares, issued 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 | (563,537 | ) | (166,757 | ) | ||||
| Additional paid in capital | 42,841,302 | 42,415,894 | ||||||
| Accumulated deficit | (35,275,053 | ) | (35,824,200 | ) | ||||
| Total stockholders’ equity | 29,808,572 | 29,230,773 | ||||||
| $ | 187,261,759 | $ | 156,490,377 | |||||
4
FLEXSHOPPER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2024 and 2023
(unaudited)
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income/ (loss) | 549,147 | $ | (4,587,769 | ) | ||||
| Adjustments to reconcile net income/ (loss) to net cash (used in)/ provided by operating activities: | ||||||||
| Depreciation and impairment of lease merchandise | 43,021,351 | 42,893,163 | ||||||
| Other depreciation and amortization | 7,134,573 | 5,674,931 | ||||||
| Amortization of debt issuance costs | 824,499 | 376,857 | ||||||
| Amortization of discount on the promissory note related to acquisition | - | 177,714 | ||||||
| Compensation expense related to stock-based compensation | 528,920 | 1,336,367 | ||||||
| Provision for doubtful accounts | 25,373,485 | 32,123,950 | ||||||
| Deferred income tax | 161,415 | (1,192,223 | ) | |||||
| Net changes in the fair value of loans receivables at fair value | (11,165,374 | ) | (6,258,279 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Lease receivables | (46,759,866 | ) | (38,004,947 | ) | ||||
| Loans receivables at fair value | (156,476 | ) | 7,510,901 | |||||
| Prepaid expenses and other assets | (1,404,487 | ) | 641,039 | |||||
| Lease merchandise | (37,976,921 | ) | (34,939,330 | ) | ||||
| Purchase consideration payable related to acquisition | - | 208,921 | ||||||
| Lease liabilities | (31,801 | ) | (19,566 | ) | ||||
| Accounts payable | (3,535,032 | ) | (2,501,399 | ) | ||||
| Accrued payroll and related taxes | 166,174 | 293,018 | ||||||
| Accrued expenses | (520,787 | ) | (1,170,585 | ) | ||||
| Net cash (used in)/ provided by operating activities | (23,791,180 | ) | 2,562,763 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchases of property and equipment, including capitalized software costs | (4,889,386 | ) | (4,565,819 | ) | ||||
| Purchases of data costs | (1,335,743 | ) | (570,820 | ) | ||||
| Net cash used in investing activities | (6,225,129 | ) | (5,136,639 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from loan payable under credit agreement | 34,961,690 | 7,800,000 | ||||||
| Repayment of loan payable under credit agreement | - | (2,795,000 | ) | |||||
| Repayment of promissory notes to related parties | (1,000,000 | ) | ||||||
| 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 | ) | (7,308 | ) | ||||
| Repayment of purchase consideration payable related to acquisition | - | (144,913 | ) | |||||
| Tax payments associated with equity-based compensation transactions | (103,488 | ) | - | |||||
| Purchase of treasury stock | (396,780 | ) | (100,225 | ) | ||||
| Net cash provided by financing activities | 32,933,721 | 2,138,336 | ||||||
| INCREASE/ (DECREASE) IN CASH | 2,917,412 | (435,540 | ) | |||||
| CASH, beginning of period | 4,413,130 | 6,173,349 | ||||||
| CASH, end of period | $ | 7,330,542 | $ | 5,737,809 | ||||
| Supplemental cash flow information: | ||||||||
| Interest paid | $ | 14,759,775 | $ | 12,811,332 | ||||
| Noncash investing and financing activities | ||||||||
| Due date extension of warrants | $ | - | $ | 917,581 | ||||
5
Non-GAAP Financial Measures
We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.
Adjusted EBITDA represents net income before interest, stock-based compensation, taxes, depreciation (other than depreciation of leased merchandise), amortization, and one-time or non-recurring items. We believe that Adjusted EBITDA provides us with an understanding of one aspect of earnings before the impact of investing and financing charges and income taxes.
Key performance metrics for the three months ended September 30, 2024, and September 30, 2023 are as follows:
| Three Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Gross Profit: | ||||||||||||||||
| Gross lease billings and fees | $ | 36,381,080 | $ | 31,266,666 | $ | 5,114,414 | 16.4 | % | ||||||||
| Provision for doubtful accounts | (8,083,009 | ) | (10,038,122 | ) | 1,955,113 | (19.5 | )% | |||||||||
| Gain on sale of lease receivables | 15,791 | (146,345 | ) | 162,136 | (110.8 | )% | ||||||||||
| Lease placement collections | 50,328 | - | 50,328 | - | ||||||||||||
| Net lease billing and fees | $ | 28,364,190 | $ | 21,082,199 | $ | 7,281,991 | 34.5 | % | ||||||||
| Loan revenues and fees | 2,780,667 | 3,208,920 | (428,253 | ) | (13.3 | )% | ||||||||||
| Net changes in the fair value of loans receivable | 6,266,498 | 7,095,327 | (828,829 | ) | (11.7 | )% | ||||||||||
| Net loan revenue | 9,047,165 | 10,304,247 | (1,257,082 | ) | (12.2 | )% | ||||||||||
| Retail revenue | 1,177,146 | - | 1,177,146 | - | ||||||||||||
| Total revenues | $ | 38,588,501 | $ | 31,386,446 | $ | 7,202,055 | 22.9 | % | ||||||||
| Depreciation and impairment of lease merchandise | (14,486,564 | ) | (13,061,958 | ) | (1,424,606 | ) | 10.9 | % | ||||||||
| Loans origination costs and fees | (677,913 | ) | (1,389,107 | ) | 711,194 | (51.2 | )% | |||||||||
| Cost of retail revenues | (923,203 | ) | — | (923,203 | ) | — | % | |||||||||
| Gross profit | $ | 22,500,821 | $ | 16,935,381 | $ | 5,565,440 | 32.9 | % | ||||||||
| Gross profit margin | 58 | % | 54 | % | ||||||||||||
| Three Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Adjusted EBITDA: | ||||||||||||||||
| Net income | $ | 2,366,384 | $ | 940,101 | $ | 1,426,283 | 151.7 | % | ||||||||
| Income taxes expense | 1,518,514 | 265,517 | 1,252,997 | 471.9 | % | |||||||||||
| Amortization of debt issuance costs | 314,702 | 194,682 | 120,020 | 61.6 | % | |||||||||||
| Amortization of discount on the promissory note related to acquisition | - | 59,238 | (59,238 | ) | (100.0 | )% | ||||||||||
| Other amortization and depreciation | 2,436,357 | 1,964,229 | 472,128 | 24.0 | % | |||||||||||
| Interest expense | 5,357,892 | 4,492,881 | 865,011 | 19.3 | % | |||||||||||
| Stock-based compensation | 156,922 | 471,819 | (314,897 | ) | (66.7 | )% | ||||||||||
| Adjusted EBITDA | $ | 12,150,771 | $ | 8,388,467 | $ | 3,762,304 | 44.9 | % | ||||||||
6
Key performance metrics for the nine months ended September 30, 2024 and 2023 are as follows:
| Nine Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Gross Profit: | ||||||||||||||||
| Gross lease billings and fees | $ | 106,352,849 | $ | 98,023,406 | $ | 8,329,443 | 8.5 | % | ||||||||
| Provision for doubtful accounts | (25,373,485 | ) | (32,123,950 | ) | 6,750,465 | (21.0 | )% | |||||||||
| Gain on sale of lease receivables | 77,225 | 2,803,745 | (2,726,520 | ) | (97.2 | )% | ||||||||||
| Lease placement collections | 215,384 | - | 215,384 | - | ||||||||||||
| Net lease billing and fees | $ | 81,271,973 | $ | 68,703,201 | $ | 12,568,772 | 18.3 | % | ||||||||
| Loan revenues and fees | 8,527,443 | 11,742,778 | (3,215,335 | ) | (27.4 | )% | ||||||||||
| Net changes in the fair value of loans receivable | 11,165,374 | 6,258,279 | 4,907,095 | 78.4 | % | |||||||||||
| Net loan revenues | $ | 19,692,817 | $ | 18,001,057 | $ | 1,691,760 | 9.4 | % | ||||||||
| Retail revenues | 3,327,468 | - | 3,327,468 | - | ||||||||||||
| Total revenues | $ | 104,292,258 | $ | 86,704,258 | $ | 17,588,000 | 20.3 | % | ||||||||
| Depreciation and impairment of lease merchandise | (43,021,351 | ) | (42,893,163 | ) | (128,188 | ) | 0.3 | % | ||||||||
| Loans origination costs and fees | (2,395,780 | ) | (4,878,158 | ) | 2,482,378 | (50.9 | )% | |||||||||
| Cost of retail revenues | (2,593,505 | ) | - | (2,593,505 | ) | - | ||||||||||
| Gross profit | $ | 56,281,622 | $ | 38,932,937 | $ | 17,348,685 | 44.6 | % | ||||||||
| Gross profit margin | 54 | % | 45 | % | ||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Adjusted EBITDA: | ||||||||||||||||
| Net income/ (loss) | $ | 549,147 | $ | (4,587,769 | ) | $ | 5,136,916 | (112.0 | )% | |||||||
| Income taxes expense/ (benefit) | 215,550 | (1,185,247 | ) | 1,400,797 | (118.2 | )% | ||||||||||
| Amortization of debt issuance costs | 824,499 | 376,857 | 447,642 | 118.8 | % | |||||||||||
| Amortization of discount on the promissory note related to acquisition | - | 177,714 | (177,714 | ) | (100.0 | )% | ||||||||||
| Other amortization and depreciation | 7,134,573 | 5,674,931 | 1,459,642 | 25.7 | % | |||||||||||
| Interest expense | 15,389,344 | 13,292,114 | 2,097,230 | 15.8 | % | |||||||||||
| Stock-based compensation | 528,920 | 1,336,367 | (807,447 | ) | (60.4 | )% | ||||||||||
| Adjusted EBITDA | $ | 24,642,033 | $ | 15,084,967 | $ | 9,557,066 | 63.4 | % | ||||||||
The Company refers to Adjusted EBITDA in the above table as the Company uses this measure to evaluate operating performance and to make strategic decisions about the Company. Management believes that Adjusted EBITDA provides relevant and useful information which is widely used by analysts, investors and competitors in its industry in assessing performance.
7