0001397047-24-000006 | 10-Q | XBRL Viewer

CAPITAL STRUCTURE

9 Months Ended

Sep. 30, 2024

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 September 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 September 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 September 30, 2024 totaled $26,525,613. As of September 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.”

See subsequent events related to Common Stock on Note 18.

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 no expense related to warrants during the three and nine months ended September 30, 2024, and the expense related to warrants was $917,581 and $917,581 for the three and nine months ended September 30, 2023, respectively.

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


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

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 have a term through May 2025 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 362,793 shares of common stock for a net cost of $396,780 for the nine months ended September 30, 2024.

- Definition

The entire disclosure for equity.

+ References

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+ Details

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS Common Stock On October 7, 2024, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares of the Company’s common stock, par value $0.0001 per share, from 40,000,000 shares to 100,000,000 shares. The increase in the number of authorized shares was approved by the Company’s stockholders on October 7, 2024. Equity Compensation Plan On August 27, 2024, the Company Board of Directors approved Amendment No. 5 to the 2018 Omnibus Equity Plan (the “2018 Plan Amendment”), subject to stockholder approval. The 2018 Plan Amendment was approved by the Company’s stockholders on October 7, 2024. The 2018 Plan Amendment increased (a) the total number of shares available for issuance under the 2018 Plan by 3,000,000 shares, to a new total of 11,057,000 shares, and (b) the number of shares available for issuance as “incentive stock options,” within the meaning of Internal Revenue Code (the “Code”) Section 422 (“ISOs”), by 3,000,000 shares. Preferred Stock Purchase Option Agreement On October 25, 2024, the Company entered into a Preferred Stock Purchase Option Agreement granting the Company the right at any time through October 25, 2025 to repurchase and cancel 20,000 shares of its series 2 convertible preferred stock, representing approximately 91% of the shares in such series, at varying purchase prices below the then-current liquidation value of the series 2 convertible preferred stock, ranging from $20,250,000 to $22,500,000, depending on when the Company exercises the option, from B2 FIE V LLC, which acquired the preferred stock in a private placement in June 2016. Each share of series 2 convertible preferred stock is convertible into 266.2942 shares of the Company’s common stock or an aggregate of 5,325,888 shares of its common stock, based on the series 2 convertible preferred stock issue price of $1,000 per share and conversion rate of $3.76 per share, and accrues dividends through an increase in its liquidation preference at an annual rate equal to 10% of the original series 2 convertible preferred stock issue price per share. The purchase price of the series 2 convertible preferred stock, which was negotiated between the parties, represents approximately 50% of the current liquidation preference of the preferred stock, which was approximately $44.2 million as of September 30, 2024. The terms of the preferred stock repurchase provide that, if the Company exercises the option and within 12 months following the date of the Preferred Stock Purchase Option Agreement, it completes a liquidity event or a change of control occurs, the Company would be required to make an incremental “true-up” payment to B2 FIE V LLC. This payment would be in an amount equal to the difference between the Company’s share price before the announcement of the liquidity event or change of control and the increased value of the Company’s share price, if any, after announcing the transaction, applied to the number of repurchased preferred shares on an as-if-converted to common stock basis. A discount of 8.3% is applied to this payment every 30-day period following the closing of the preferred stock repurchase. Additionally, assuming the shares of series 2 preferred stock are repurchased, and the Company is awarded monetary damages or a settlement award in connection with its patent infringement lawsuits, the Company would also be required to pay a portion of those proceeds to B2 FIE V LLC. That portion would be determined by the increase in the value of the Company’s share price, if any, after announcing the award as applied to the number of repurchased preferred shares on an as-if-converted to common stock basis, provided that the Company is not required to pay B2 FIE V LLC more than $4.00 per share on any share increase in value or 18% of the award. Rights Offering On October 28, 2024, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission for a proposed rights offering in which it plans to distribute to its stockholders non-transferable subscription rights to purchase up to 35,000,000 units. Each unit will consist of one share of common stock and three short-term rights to purchase additional shares of common stock at varying discounted market-based prices. The Company intends to use the net proceeds of the rights offering to provide funding for the repurchase of over 90% of its series 2 convertible preferred stock, reduce a portion of the outstanding balance under its credit facility, and finance the costs of potential acquisitions of other payment solutions companies. Any remaining proceeds will be used for general corporate purposes.

INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 15,338,654	$ 15,338,654
Accumulated Amortization	(3,274,536)	(1,947,349)
Total	$ 12,064,118	$ 13,391,305
Patent
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years
Gross Carrying Amount	$ 30,760	$ 30,760
Accumulated Amortization	(30,760)	(30,760)
Total	$ 0	$ 0
Franchise Rights
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years
Gross Carrying Amount	$ 12,744,367	$ 12,744,367
Accumulated Amortization	(2,336,437)	(1,380,638)
Total	$ 10,407,930	$ 11,363,729
Liberty Loan brand
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years
Gross Carrying Amount	$ 340,218	$ 340,218
Accumulated Amortization	(62,296)	(36,855)
Total	$ 277,922	$ 303,363
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years
Gross Carrying Amount	$ 86,113	$ 86,113
Accumulated Amortization	(15,990)	(9,334)
Total	$ 70,123	$ 76,779
Non contractual customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years	5 years
Gross Carrying Amount	$ 1,952,371	$ 1,952,371
Accumulated Amortization	(716,119)	(423,020)
Total	$ 1,236,252	$ 1,529,351
Customer list
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years	3 years
Gross Carrying Amount	$ 184,825	$ 184,825
Accumulated Amortization	(112,934)	(66,742)
Total	$ 71,891	$ 118,083

CAPITAL STRUCTURE - Narrative (Details)	3 Months Ended		9 Months Ended
CAPITAL STRUCTURE - Narrative (Details)	Sep. 30, 2024 USD ($) vote $ / shares shares	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) vote $ / shares shares	Sep. 30, 2023 USD ($)	Dec. 31, 2023 $ / shares shares	Aug. 31, 2021 shares	Sep. 30, 2018 $ / shares shares
Class of Warrant or Right [Line Items]
Convertible preferred stock, shares authorized (in shares)	500,000		500,000
Convertible preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001		$ 0.001
Conversion price threshold (in dollars per share) \| $ / shares			$ 23.00
Common stock, shares authorized (in shares)	40,000,000		40,000,000		40,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001		$ 0.0001		$ 0.0001
Common stock, number of votes \| vote	1		1
Warrant expense \| $	$ 0	$ 917,581	$ 0	$ 917,581
Related Party
Class of Warrant or Right [Line Items]
Deferred debt cost \| $			$ 917,581
Conversion Warrants
Class of Warrant or Right [Line Items]
Warrants exercisable (in shares)							1,055,184
Exercise price (in dollars per share) \| $ / shares							$ 1.25
Extension period from original expiration			30 months
Consulting Warrants
Class of Warrant or Right [Line Items]
Warrants exercisable (in shares)						1,200,000
Number of warrants (in shares)	840,000		840,000
Series 1 Convertible Preferred Stock
Class of Warrant or Right [Line Items]
Convertible preferred stock, shares authorized (in shares)	250,000		250,000		250,000
Convertible preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001		$ 0.001		$ 0.001
Preferred stock, convertible, conversion ratio (in shares)	1.32230		1.32230
Convertible preferred stock, shares outstanding (in shares)	170,332		170,332		170,332
Convertible preferred stock, shares issuable (in shares)	225,231		225,231
Series 2 Convertible Preferred Stock
Class of Warrant or Right [Line Items]
Convertible preferred stock, shares authorized (in shares)	25,000		25,000		25,000
Convertible preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001		$ 0.001		$ 0.001
Convertible preferred stock, shares outstanding (in shares)	21,952		21,952		21,952
Convertible preferred stock, shares issuable (in shares)	266		266
Proceeds from issuance of convertible preferred stock \| $			$ 20,000,000.0
Sale of stock, price per share (in dollars per share) \| $ / shares	$ 1,000		$ 1,000
Annual rate			10.00%
Cumulative accrued dividends (in Dollars) \| $	$ 26,525,613		$ 26,525,613
Convertible preferred stock, consecutive trading day period			45 days
Series 2 Convertible Preferred Stock \| B2 FIE V LLC
Class of Warrant or Right [Line Items]
Sale of stock, number of shares issued in transaction (in shares)			20,000
Series 2 Convertible Preferred Stock \| Different Investor
Class of Warrant or Right [Line Items]
Sale of stock, number of shares issued in transaction (in shares)			1,952
Proceeds from issuance of convertible preferred stock \| $			$ 1,950,000

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 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	0	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	0	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	0	(2,795,000)
Repayment of loan payable under Basepoint credit agreement	0	(1,500,000)
Repayment of promissory notes to related parties	0	(1,000,000)
Debt issuance related costs	(1,523,100)	(115,403)
Proceeds from exercise of stock options	0	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)	0
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	$ 0	$ 917,581

BASEPOINT CREDIT AGREEMENT

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

BASEPOINT CREDIT AGREEMENT

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 September 30, 2024, amounts borrowed bear interest at 14.21%.

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 September 30, 2024, follows:


	September 30, 2024
	Required Covenant		Actual Position
Equity Book Value not less than	$	16,452,247	$	29,808,572
Liquidity greater than	4,000,000		10,513,666
Cash greater than	3,000,000		7,330,542
Consolidated Total Debt to Equity Book Value ratio not to exceed	5.25		4.78

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 $12,600,000 and $34,961,690 for the three and nine months ended September 30, 2024, respectively, and $5,050,000 and $7,800,000 for the three and nine months ended September 30, 2023, respectively. The Company repaid under the Credit Agreement and $0 and $0 for the three and nine months ended September 30, 2024, respectively, and $0 and $2,795,000 for the three and nine months ended September 30, 2023, respectively.

Interest expense incurred under the Credit Agreement amounted to $4,573,654 and $12,996,319 for the three and nine months ended September 30, 2024, respectively, and $3,503,486 and $10,115,009 for the three and nine months ended September 30, 2023, respectively. The outstanding balance under the Credit Agreement was $131,416,690 as of September 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 $1,142,325 and $70,780 as of September 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 September 30, 2024.

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 $200,000. 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 September 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 $251,456 and $754,957 for the three and nine months ended September 30, 2024, respectively and to $251,456 and $843,470 for the three and nine months ended September 30, 2023, respectively . The outstanding balance under the Basepoint Credit Agreement was $7,412,605 as of September 30, 2024. Such amount is presented in the consolidated balance sheets net of unamortized issuance costs of $64,113 as of September 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 September 30, 2024.

- 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
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/470/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482925/835-30-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

+ Details

INTANGIBLE ASSETS - Schedule of Future Estimated Amortization Expense (Details)	Sep. 30, 2024 USD ($)
Goodwill and Intangible Asset Impairment [Abstract]
2024 (three months remaining)	$ 442,290
2025	1,764,026
2026	1,707,552
2027	1,675,012
2028	1,317,072
Total	$ 6,905,952

BUSINESS (Details)	Sep. 30, 2024 state
Flex Revolution, LLC
Business Ownership [Line Items]
Number of states in which entity operates	11
FlexShopper, LLC
Business Ownership [Line Items]
Ownership percentage	100.00%
FlexLending, LLC
Business Ownership [Line Items]
Ownership percentage	100.00%
Flex Revolution, LLC
Business Ownership [Line Items]
Ownership percentage	100.00%

CONTINGENCIES AND OTHER UNCERTAINTIES (Details)	9 Months Ended
CONTINGENCIES AND OTHER UNCERTAINTIES (Details)	Sep. 30, 2024 renewalTerm
Commitments and Contingencies Disclosure [Abstract]
Employee agreements, useful life	3 years
Number of successive renewal terms	3
Renewal term	1 year

EQUITY COMPENSATION PLANS - Schedule of Weighted Average of Stock Options Granted (Details) - $ / shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Exercise price (in dollars per share)	$ 1.03	$ 0.80
Expected life	4 years	6 years
Expected volatility	69.00%	95.00%
Dividend yield	0.00%	0.00%
Risk-free interest rate	3.55%	3.59%

CONTINGENCIES AND OTHER UNCERTAINTIES	9 Months Ended
CONTINGENCIES AND OTHER UNCERTAINTIES	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES AND OTHER UNCERTAINTIES	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 as a defendant. 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.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 720
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483359/720-20-50-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 5.Y.Q4)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480102/450-20-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 5.Y.Q2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480102/450-20-S99-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483076/450-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 20
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/450-20/tableOfContent

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483076/450-20-50-4

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483076/450-20-50-9

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 30
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/450-30/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 450
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483049/450-30-50-1

+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Computation of Basic and Diluted Earnings Per Common Share (Details) - USD ($)	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator
Net income/ (loss)	$ 2,366,384	$ (1,603,058)	$ (214,179)	$ 940,101	$ (5,297,655)	$ (230,215)	$ 549,147	$ (4,587,769)
Series 2 Convertible Preferred Stock dividends	(1,176,402)			(1,069,456)			(3,337,600)	(3,034,182)
Net income/ (loss) attributable to common and Series 1 Convertible Preferred shareholders - diluted	1,189,982			(129,355)			(2,788,453)	(7,621,951)
Net income/ (loss) attributable to common and Series 1 Convertible Preferred shareholders - basic	1,189,982			(129,355)			(2,788,453)	(7,621,951)
Net loss attributable to common and Series 1 Convertible Preferred Stock	1,189,982			(129,355)
Net income attributable to Series 1 Convertible Preferred Stock	(24,435)			0			0	0
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock	12,147			0			0	0
Net loss attributable to common shares- Numerator for basic EPS	1,177,694			(129,355)			(2,788,453)	(7,621,951)
Effect of dilutive securities:
Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS	$ 1,177,694			$ (129,355)			$ (2,788,453)	$ (7,621,951)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS (in Shares)	21,586,935			21,716,852			21,547,702	21,740,027
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS (in shares)	22,231,788			21,716,852			21,547,702	21,740,027
Basic (in dollars per share)	$ 0.05			$ (0.01)			$ (0.13)	$ (0.35)
Diluted (in dollars per share)	$ 0.05			$ (0.01)			$ (0.13)	$ (0.35)
Series 2 Convertible Preferred Stock
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends	$ 0			$ 0			$ 0	$ 0
Denominator
Effect of dilutive securities	0			0			0	0
Series 1 Convertible Preferred Stock
Denominator
Effect of dilutive securities	225,231			0			0	0
Common stock options and performance share units
Denominator
Effect of dilutive securities	419,622			0			0	0
Common Stock Warrants
Denominator
Effect of dilutive securities	$ 0			$ 0			$ 0	$ 0

EQUITY COMPENSATION PLANS - Schedule of Activity in Stock Option (Details) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Aggregate intrinsic value
Canceled/ Forfeited	$ 480
Option
Number of options
Beginning balance, outstanding (in shares)	4,452,447	3,919,228
Granted (in shares)	677,500	1,596,567
Exercised/Released (in shares)	0	(1,500)
Canceled/Forfeited (in shares)	(1,500)	(1,105,900)
Expired (in shares)	(55,000)
Ending balance, outstanding (in shares)	5,073,447	4,408,395
Vested and exercisable (in shares)	3,660,278	3,183,408
Weighted average exercise price
Beginning balance, outstanding (in dollars per share)	$ 1.57	$ 1.97
Expired (in dollars per share)	8.00
Granted (in dollars per share)	1.03	0.80
Canceled/Forfeited (in dollars per share)	0.79	1.91
Exercised (in dollars per share)		0.79
Ending balance, outstanding (in dollars per share)	1.43	1.56
Vested and exercisable (in dollars per share)	$ 1.57	$ 1.74
Weighted average contractual term (years)
Outstanding, weighted average contractual term (years)	6 years 5 months 15 days	7 years 6 months 21 days
Vested and exercisable, weighted average contractual term (years)	6 years 5 months 15 days	7 years 1 month 13 days
Aggregate intrinsic value
Beginning balance, outstanding	$ 2,152,602	$ 52,223
Granted		75
Exercised		345
Ending balance, outstanding	525,296	561,402
Vested and exercisable, aggregate intrinsic value	$ 393,901	$ 328,031

LOAN PAYABLE UNDER CREDIT AGREEMENT

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

LOAN PAYABLE UNDER CREDIT AGREEMENT


	September 30, 2024
	Required Covenant		Actual Position
Equity Book Value not less than	$	16,452,247	$	29,808,572
Liquidity greater than	4,000,000		10,513,666
Cash greater than	3,000,000		7,330,542
Consolidated Total Debt to Equity Book Value ratio not to exceed	5.25		4.78

BASEPOINT CREDIT AGREEMENT

- Definition

+ References

+ Details

INTANGIBLE ASSETS - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
INTANGIBLE ASSETS - Narrative (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Goodwill and Intangible Asset Impairment [Abstract]
Intangible asset amortization expense	$ 442,427	$ 442,636	$ 1,327,187	$ 1,328,754

PROMISSORY NOTES-RELATED PARTIES (Tables)

9 Months Ended

Sep. 30, 2024

Schedule of Related Party Transactions

Amounts payable under the promissory notes are as follows:


	Debt Principal		Interest
2024	$	-	$	172,848
2025	$	10,750,000	$	-

LEASES (Tables)

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Assets And Liabilities, Lessee

Supplemental balance sheet information related to leases is as follows:


	Balance Sheet Classification	September 30, 2024		December 31, 2023
Assets
Operating Lease Asset	Right of use asset, net	$	1,093,551	$	1,233,538
Finance Lease Asset	Right of use asset, net	-		3,472
Total Lease Assets		$	1,093,551	$	1,237,010

Liabilities
Operating Lease Liability – current portion	Current Lease Liabilities	$	275,029	$	240,444
Finance Lease Liability – current portion	Current Lease Liabilities	—		4,608
Operating Lease Liability – net of current portion	Long Term Lease Liabilities	1,111,740		1,321,578
Total Lease Liabilities		$	1,386,769	$	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	%	4.0
Finance Leases	13.39	%	0

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


	Nine Months Ended September 30,
	2024		2023
Cash payments for operating leases	$	320,471	$	311,137
Cash payments for finance leases	4,782		7,308

Schedule of Undiscounted Operating Lease Liabilities

Below is a summary of undiscounted operating lease liabilities as of September 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	$	109,663
2025	443,038
2026	456,330
2027	470,019
2028 and thereafter	303,574
Total undiscounted cash flows	1,782,624
Less: interest	(395,855)
Present value of lease liabilities	$	1,386,768

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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 – 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 September 30, 2024 and December 31, 2023, the Company had no cash equivalents.

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 – 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 Accounting Standard Codification ("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 - 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 September 30, 2024 and December 31, 2023:


	September 30, 2024		December 31, 2023

Lease receivables	$	104,879,703	$	64,749,918
Allowance for doubtful accounts	(38,698,232)		(19,954,828)
Lease receivables, net	$	66,181,471	$	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 $2,393,131 and $6,630,081 for the three and nine months ended September 30, 2024, respectively, and $726,007 and $33,454,814 for the three and nine months ended September 30, 2023, respectively.


	Nine Months Ended September 30, 2024		Year Ended December 31, 2023
Beginning balance	$	19,954,828	$	13,078,800
Provision	25,373,485		42,505,647
Accounts written off	(6,630,081)		(35,629,619)
Ending balance	$	38,698,232	$	19,954,828

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 September 30, 2024 and December 31, 2023:


	September 30, 2024		December 31, 2023
Lease merchandise at cost	$	48,382,621	$	49,687,498
Accumulated depreciation and impairment reserve	(24,295,611)		(20,556,058)
Lease merchandise, net	$	24,087,010	$	29,131,440

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 $6,266,498 and $11,165,374 for the three and nine months ended September 30, 2024, respectively, and a gain of $7,095,327 and $6,258,279 for the three and nine months ended September 30, 2023, respectively.

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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Lease billings and accruals	$	36,381,080	$	31,266,666	$	106,352,849	$	98,023,406
Provision for doubtful accounts	(8,083,009)		(10,038,122)		(25,373,485)		(32,123,950)
Gain on sale of lease receivables	15,791		(146,345)		77,225		2,803,745
Lease placement collections	50,328		-		215,384		-
Lease revenues and fees	$	28,364,190	$	21,082,199	$	81,271,973	$	68,703,201

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 $451,555 for the three and nine months ended September 30, 2024, respectively, and $70,368 and $211,104 for the three and nine months ended September 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 $344,093 for the three and nine months ended September 30, 2024, respectively, and $114,698 and $152,930 for the three and nine months ended September 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 $28,851 for the three and nine months ended September 30, 2024, respectively, was $9,617 and $12,823 for the three and nine months ended September 30, 2023, respectively.

Intangible Assets – Intangible assets consist of a patent on the Company’s LTO payment method at check-out for third party e-commerce sites 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 $442,427 and $1,327,187 for the three and nine months ended September 30, 2024, respectively, and $442,636 and $1,328,754 for the three and nine months ended September 30, 2023, respectively.

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 $1,605,989 and $4,703,053 for the three and nine months ended September 30, 2024, respectively, and $1,271,216 and $3,641,634 for the three and nine months ended September 30, 2023, respectively.

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 $1,408,891 and $3,914,161 for the three and nine months ended September 30, 2024, respectively, and $1,231,454 and $3,754,292 for the three and nine months ended September 30, 2023, respectively. Capitalized software amortization expense was $1,250,175 and $3,601,341 for the three and nine months ended September 30, 2024, respectively, and $1,011,106 and $2,881,511 for the three and nine months ended September 30, 2023, respectively.

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 $391,431 and $1,335,743 for the three and nine months ended September 30, 2024, respectively, and $227,393 and $570,820 for the three and nine months ended September 30, 2023, respectively. Capitalized data costs amortization expense was $387,941 and $1,104,333 for the three and nine months ended September 30, 2024, respectively, and $250,376 and $704,543 for the three and nine months ended September 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 – 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 nine months ended September 30, 2024 there were no impairments.

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

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

Per Share Data - Per share data is computed by use of the two-class method as a result of outstanding Series 1 Convertible Preferred Stock, which participates in dividends with the common stock and accordingly has participation rights in undistributed earnings as if all such earnings had been distributed during the period (see Note 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.


	September 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	5,073,447	5,435,572
Common Stock Warrants	2,255,184	2,255,184
Performance Share Units	937,499	1,250,000
	14,337,056	15,011,682

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


	Nine Months Ended September 30,
	2024		2023
Numerator
Net income/ (loss)	$	549,147	$	(4,587,769)
Series 2 Convertible Preferred Stock dividends	(3,337,600)		(3,034,182)
Net loss attributable to common and Series 1 Convertible Preferred Stock	(2,788,453)		(7,621,951)
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	(2,788,453)		(7,621,951)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends	-		-
Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS	$	(2,788,453)	$	(7,621,951)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS	21,547,702		21,740,027
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	21,547,702		21,740,027
Basic EPS	$	(0.13)	$	(0.35)
Diluted EPS	$	(0.13)	$	(0.35)

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


	Three Months Ended September 30,
	2024		2023
Numerator
Net income	$	2,366,384	$	940,101
Series 2 Convertible Preferred Stock dividends	(1,176,402)		(1,069,456)
Net income/ (loss) attributable to common and Series 1 Convertible Preferred Stock	1,189,982		(129,355)
Net income attributable to Series 1 Convertible Preferred Stock	(24,435)		-
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock	12,147		-
Net income/ (loss) attributable to common shares- Numerator for basic EPS	1,177,694		(129,355)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends	-		-
Net income/ (loss) attributable to common shares after assumed conversions – Numerator for diluted EPS	$	1,177,694	$	(129,355)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS	21,586,935		21,716,852
Effect of dilutive securities
Series 2 Convertible Preferred Stock	-		-
Series 1 Convertible Preferred Stock	225,231		-
Common stock options and performance share units	419,622		-
Common stock warrants	-		-
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator for diluted EPS	22,231,788		21,716,852
Basic EPS	$	0.05	$	(0.01)
Diluted EPS	$	0.05	$	(0.01)

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 – 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- 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 September 30, 2024 and December 31, 2023 is as follows:


	Fair Value Measurement Using						Carrying Amount		Unpaid Principal Balance
Financial instruments – As of September 30, 2024 (1)	Level 1		Level 2		Level 3		Carrying Amount		Unpaid Principal Balance
Loan receivables at fair value	$	-	$	-	$	47,116,140	$	47,116,140	$	85,301,661


	Fair Value Measurement Using						Carrying Amount		Unpaid Principal Balance
Financial instruments – As of December 31, 2023 (1)	Level 1		Level 2		Level 3		Carrying Amount		Unpaid Principal Balance
Loan receivables at fair value	$	-	$	-	$	35,794,290	$	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 the 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 nine months ended September 30, 2024 and the year ended December 31, 2023:


	Nine Months Ended September 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	39,193,233		57,554,746
Interest and fees(1)	8,527,443		14,801,188
Collections	(47,564,200)		(80,089,020)
Net charge off (1)	(2,833,156)		(11,041,155)
Net change in fair value(1)	12,939,532		21,259,009
Ending balance	$	47,116,140	$	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 September 30, 2024 and December 31, 2023:


	September 30, 2024						December 31, 2023
	Minimum		Maximum		Weighted Average(2)		Minimum		Maximum		Weighted Average
Estimated losses(1)	0	%	93.9	%	60.6	%	0	%	92.5	%	28.9	%
Servicing costs	-		-		4.1	%	-		-		4.7	%
Discount rate	-		-		20.3	%	-		-		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 September 30, 2024 and December 31, 2023 concerning loan receivables at fair value are as follows:


	September 30, 2024		December 31, 2023
Aggregate fair value of loan receivables that are 90 days or more past due	$	39,728,088	$	27,828,083
Unpaid principal balance of loan receivables that are 90 days or more past due	$	77,354,984	$	29,304,704
Aggregate fair value of loan receivables in non-accrual status	$	39,906,943	$	27,764,926

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement (Details)	Sep. 30, 2024	Dec. 31, 2023
Estimated losses \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable, measurement input	0	0
Estimated losses \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable, measurement input	0.939	0.925
Estimated losses \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable, measurement input	0.606	0.289
Servicing costs \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable, measurement input	0	0
Servicing costs \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable, measurement input	0	0
Servicing costs \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable, measurement input	0.041	0.047
Discount rate \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable, measurement input	0	0
Discount rate \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable, measurement input	0	0
Discount rate \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans receivable, measurement input	0.203	0.201

CAPITAL STRUCTURE - Schedule of Outstanding Stock Warrants (Details) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Common Stock Warrants Outstanding (in shares)	2,255,184
$1.25 Warrant, One
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.25
Common Stock Warrants Outstanding (in shares)	1,055,184
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.25 Warrant, Two
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.25
Common Stock Warrants Outstanding (in shares)	160,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.34 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.34
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.40 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.40
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.54 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.54
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.62 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.62
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.68 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.68
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.69 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.69
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.74 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.74
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.76 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.76
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.91 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.91
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$1.95 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 1.95
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.00 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.00
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.01 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.01
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.08 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.08
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.45 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.45
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.53 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.53
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.57 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.57
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.70 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.70
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.78 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.78
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.79 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.79
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.89 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.89
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	3 years	4 years
$2.93 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.93
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$2.97 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 2.97
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$3.09 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 3.09
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	2 years	3 years
$3.17 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 3.17
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	3 years	4 years
$3.19 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 3.19
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years
$3.27 Warrant
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 3.27
Common Stock Warrants Outstanding (in shares)	40,000
Class Of Warrants Or Right Weighted Average Remaining Contractual Life	1 year	2 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) segment	Sep. 30, 2023 USD ($)	Dec. 31, 2023
Accounting Policies [Line Items]
Operating segment \| segment			1
Number of reportable segments \| segment			1
Lease receivables balances charged off	$ 2,393,131	$ 726,007	$ 6,630,081	$ 33,454,814
Gain (loss) on change in fair value of loans receivable	6,266,498	7,095,327	11,165,374	6,258,279
Amortization of debt issuance costs			824,499	376,857
Intangible asset amortization expense	442,427	442,636	1,327,187	1,328,754
Depreciation and amortization expense	1,605,989	1,271,216	4,703,053	3,641,634
Capitalized amortization expense	1,250,175
Asset impairment charges	0		0
Software
Accounting Policies [Line Items]
Capitalized costs	1,408,891	1,231,454	3,914,161	3,754,292
Capitalized amortization expense		1,011,106	3,601,341	2,881,511
Data
Accounting Policies [Line Items]
Capitalized costs	391,431	227,393	1,335,743	570,820
Capitalized amortization expense	$ 387,941	250,376	$ 1,104,333	704,543
Minimum
Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives	2 years		2 years
Maximum
Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives	7 years		7 years
Patent
Accounting Policies [Line Items]
Finite-lived intangibles, estimated useful life	10 years		10 years		10 years
Liberty Loan brand
Accounting Policies [Line Items]
Finite-lived intangibles, estimated useful life	10 years		10 years		10 years
Non-compete agreements
Accounting Policies [Line Items]
Finite-lived intangibles, estimated useful life	10 years		10 years		10 years
Non contractual customer relationships
Accounting Policies [Line Items]
Finite-lived intangibles, estimated useful life	5 years		5 years		5 years
Customer list
Accounting Policies [Line Items]
Finite-lived intangibles, estimated useful life	3 years		3 years		3 years
Promissory Notes
Accounting Policies [Line Items]
Amortization of debt issuance costs	$ 114,698	114,698	$ 344,093	152,930
2024 Credit Agreement
Accounting Policies [Line Items]
Amortization of debt issuance costs	190,388	70,368	451,555	211,104
Basepoint Credit Agreement
Accounting Policies [Line Items]
Amortization of debt issuance costs	$ 9,617	$ 9,617	$ 28,851	$ 12,823

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unpaid Principal Balance	$ 85,301,661	$ 48,076,705
Fair Value, Recurring \| Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loan receivables at fair value	47,116,140	35,794,290
Level 1 \| Fair Value, Recurring \| Fair Value Measurement Using
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loan receivables at fair value	0	0
Level 2 \| Fair Value, Recurring \| Fair Value Measurement Using
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loan receivables at fair value	0	0
Level 3 \| Fair Value, Recurring \| Fair Value Measurement Using
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loan receivables at fair value	$ 47,116,140	$ 35,794,290

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consist of the following:


	Estimated Useful Lives	September 30, 2024		December 31, 2023
Furniture, fixtures and vehicle	2-5 years	$	400,131	$	395,867
Website and internal use software	3 years	29,700,480		25,786,319
Computers and software	3-7 years	5,734,076		4,763,115
		35,834,687		30,945,301
Less: accumulated depreciation and amortization		(26,339,495)		(21,636,442)
		$	9,495,192	$	9,308,859

INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Asset Impairment [Abstract]

INTANGIBLE ASSETS

The following table provides a summary of our intangible assets:


	September 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		(2,336,437)		10,407,930
Liberty Loan brand	10 years	340,218		(62,296)		277,922
Non-compete agreements	10 years	86,113		(15,990)		70,123
Non contractual customer relationships	5 years	1,952,371		(716,119)		1,236,252
Customer list	3 years	184,825		(112,934)		71,891
		$	15,338,654	$	(3,274,536)	$	12,064,118


	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 $442,427 and $1,327,187 for the three and nine months ended September 30, 2024, respectively, and $442,636 and $1,328,754 for the three and nine months ended September 30, 2023, respectively.

As of September 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 (three months remaining)	442,290
2025	1,764,026
2026	1,707,552
2027	1,675,012
2028	1,317,072
Total	$	6,905,952

LOAN PAYABLE UNDER CREDIT AGREEMENT (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Covenant Requirements and FlexShopper's Actual Results

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


	September 30, 2024
	Required Covenant		Actual Position
Equity Book Value not less than	$	16,452,247	$	29,808,572
Liquidity greater than	4,000,000		10,513,666
Cash greater than	3,000,000		7,330,542
Consolidated Total Debt to Equity Book Value ratio not to exceed	5.25		4.78

LEASES - Schedule of Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term (Details)	Sep. 30, 2024
Operating Leases
Weighted Average Discount Rate	13.03%
Weighted Average Remaining Lease Term (in years)	4 years
Finance Leases
Weighted Average Discount Rate	0 years
Weighted Average Remaining Lease Term (in years)	13.39%

LOAN PAYABLE UNDER CREDIT AGREEMENT - Schedule of Covenant Requirements and FlexShopper's Actual Results (Details)	Sep. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Required Covenant [Abstract]
Equity Book Value not less than	$ 16,452,247
Liquidity greater than	4,000,000
Cash greater than	$ 3,000,000
Consolidated Total Debt to Equity Book Value ratio not to exceed	5.25
Actual Position [Abstract]
Equity book value	$ 29,808,572
Liquidity	10,513,666
Cash	$ 7,330,542	$ 4,413,130	$ 5,737,809	$ 6,173,349
Debt to equity ratio	4.78

EMPLOYEE BENEFIT PLAN	9 Months Ended
EMPLOYEE BENEFIT PLAN	Sep. 30, 2024
Retirement Benefits [Abstract]
EMPLOYEE BENEFIT PLAN	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 $48,811 and $146,627 for the three and nine months ended September 30, 2024, respectively, and $39,939 and $126,701 for the three and nine months ended September 30, 2023, respectively.

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Convertible preferred stock, par value (in dollars per share)	$ 0.001
Convertible preferred stock, shares authorized (in shares)	500,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	21,988,711	21,752,304
Treasury shares (in shares)	526,822	164,029
2024 Credit Agreement
Unamortized issuance costs	$ 1,142,325	$ 70,780
Promissory Notes to Related Parties
Unamortized issuance costs	305,860	649,953
Basepoint Credit Agreement
Unamortized issuance costs	$ 64,113	$ 92,964
Series 1 Convertible Preferred Stock
Convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized (in shares)	250,000	250,000
Convertible preferred stock, shares issued (in shares)	170,332	170,332
Convertible preferred stock, shares outstanding (in shares)	170,332	170,332
Convertible preferred stock, stated value	$ 5.00	$ 5.00
Series 2 Convertible Preferred Stock
Convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized (in shares)	25,000	25,000
Convertible preferred stock, shares issued (in shares)	21,952	21,952
Convertible preferred stock, shares outstanding (in shares)	21,952	21,952
Convertible preferred stock, stated value	$ 1,000	$ 1,000

PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 1,605,989	$ 1,271,216	$ 4,703,053	$ 3,641,634

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenues:
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	0	2,593,505	0
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 - basic	1,189,982	(129,355)	(2,788,453)	(7,621,951)
Net income/ (loss) attributable to common and Series 1 Convertible Preferred shareholders - diluted	$ 1,189,982	$ (129,355)	$ (2,788,453)	$ (7,621,951)
Basic and diluted income/ (loss) per common share:
Basic (in dollars per share)	$ 0.05	$ (0.01)	$ (0.13)	$ (0.35)
Diluted (in dollars per share)	$ 0.05	$ (0.01)	$ (0.13)	$ (0.35)
WEIGHTED AVERAGE COMMON SHARES:
Basic (in shares)	21,586,935	21,716,852	21,547,702	21,740,027
Diluted (in shares)	22,231,788	21,716,852	21,547,702	21,740,027
Lease revenues and fees, net
Revenues:
Total revenues	$ 28,364,190	$ 21,082,199	$ 81,271,973	$ 68,703,201
Loan revenues and fees, net of changes in fair value
Revenues:
Total revenues	9,047,165	10,304,247	19,692,817	18,001,057
Retail revenues
Revenues:
Total revenues	$ 1,177,146	$ 0	$ 3,327,468	$ 0

LEASES - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Assets, Lessee [Abstract]
Operating Lease Asset	$ 1,093,551	$ 1,233,538
Finance Lease Asset	0	3,472
Total Lease Assets	1,093,551	1,237,010
Liabilities, Lessee [Abstract]
Operating Lease Liability – current portion	275,029	240,444
Finance Lease Liability – current portion	0	4,608
Operating Lease Liability – net of current portion	1,111,740	1,321,578
Total Lease Liabilities	$ 1,386,769	$ 1,566,630

CAPITAL STRUCTURE (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of Outstanding Stock Warrants

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


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

EQUITY COMPENSATION PLANS - Schedule of Stock-Based Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 156,922	$ 471,819	$ 528,920	$ 1,336,368
Stock options
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	81,695	242,180	242,602	1,047,324
Performance Share Units
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 75,227	$ 229,639	$ 286,318	$ 289,044

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Lease Receivables Balances Charged Off Against the Allowance (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Provision for doubtful accounts	$ 8,083,009	$ 10,038,122	$ 25,373,485	$ 32,123,950
Accounts written off	(2,393,131)	$ (726,007)	(6,630,081)	(33,454,814)
Lease Receivables
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			19,954,828	$ 13,078,800	$ 13,078,800
Provision for doubtful accounts			25,373,485		42,505,647
Accounts written off			(6,630,081)		(35,629,619)
Ending balance	$ 38,698,232		$ 38,698,232		$ 19,954,828

BASEPOINT CREDIT AGREEMENT (Details) - USD ($)	3 Months Ended		9 Months Ended
BASEPOINT CREDIT AGREEMENT (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Jun. 07, 2023
Debt Instrument [Line Items]
Cash greater than	$ 3,000,000		$ 3,000,000
Basepoint Credit Agreement
Debt Instrument [Line Items]
Unamortized issuance costs	$ 64,113		$ 64,113		$ 92,964
Basepoint Credit Agreement \| Line of Credit \| Flex Revolution, LLC
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity						$ 20,000,000
Interest rate						13.42%
Covenant, liquidity, percentage of borrowing base, minimum	5.00%		5.00%
Cash greater than	$ 200,000		$ 200,000
Tangible net worth, percent of borrowing base, minimum	10.00%		10.00%
Interest expense, debt	$ 251,456	$ 251,456	$ 754,957	$ 843,470
Long-term line of credit	7,412,605		7,412,605
Unamortized issuance costs	$ 64,113		$ 64,113

LEASES - Schedule of Undiscounted Operating Lease Liabilities (Details)	Sep. 30, 2024 USD ($)
Operating Leases
2024	$ 109,663
2025	443,038
2026	456,330
2027	470,019
2028 and thereafter	303,574
Total undiscounted cash flows	1,782,624
Less: interest	(395,855)
Present value of lease liabilities	$ 1,386,768

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 18, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-37945
Registrant Name	FLEXSHOPPER, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-5456087
Entity Address, Address Line One	901 Yamato Road
Entity Address, Address Line Two	Suite 260
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33431
City Area Code	(855)
Local Phone Number	353-9289
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	FPAY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		21,461,489
Central Index Key	0001397047
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3

REVOLUTION TRANSACTION	9 Months Ended
REVOLUTION TRANSACTION	Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
REVOLUTION TRANSACTION	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.

EMPLOYEE BENEFIT PLAN (Details) - USD ($)	3 Months Ended		9 Months Ended
EMPLOYEE BENEFIT PLAN (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Retirement Benefits [Abstract]
Nondiscretionary, percentage			4.00%
Defined contribution plan, cost	$ 48,811	$ 39,939	$ 146,627	$ 126,701

EQUITY COMPENSATION PLANS

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

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 September 30, 2024, approximately 1,474,461 shares remained available for issuance under the 2018 Plan.

Stock-based compensation expense included the following components:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Stock options	$	81,695	$	242,180	$	242,602	$	1,047,324
Performance share units	75,227		229,639		286,318		289,044
Total stock-based compensation	$	156,922	$	471,819	$	528,920	$	1,336,368

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 $156,922 and $528,920 for the three and nine months ended September 30, 2024, respectively, and $471,819 and $1,336,368 for the three and nine months ended September 30, 2023, respectively. Unrecognized compensation cost related to non-vested options and PSU at September 30, 2024 amounted to $1,033,134, which is expected to be recognized over a weighted average period of 2.19 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 nine months ended September 30, 2024. The weighted average assumptions used for the stock options granted during the nine months ended September 30, 2023 were as follows:


	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023
Exercise price	$	1.03		$	0.80
Expected life	4 years			6 years
Expected volatility	69		%	95		%
Dividend yield	0		%	0		%
Risk-free interest rate	3.55		%	3.59		%

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 nine month periods ended September 30, 2024 and September 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	677,500	$	1.03
Exercised/Released	-
Canceled/ Forfeited	(1,500)	0.79			480
Expired	(55,000)	8.00			-
Outstanding at September 30, 2024	5,073,447	$	1.43	6.46	$	525,296
Vested and exercisable at September 30, 2024	3,660,278	$	1.57	6.46	$	393,901

Outstanding at January 1, 2023	3,919,228	$	1.97		$	52,223
Granted	1,596,567	0.80			75
Exercised	(1,500)	0.79			345
Canceled/ Forfeited	(1,105,900)	1.91
Outstanding at September 30, 2023	4,408,395	$	1.56	7.56	$	561,402
Vested and exercisable at September 30, 2023	3,183,408	$	1.74	7.12	$	328,031

The weighted average grant date fair value of options granted during the nine month periods ended September 30, 2024 and September 30, 2023 was $0.56 and $0.61 per share, respectively.

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 September 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 nine months ended September 30, 2024 and September 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 September 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 September 30, 2023	1,250,000	$	0.78

SHARE REPURCHASE PROGRAM

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

SHARE REPURCHASE PROGRAM

CAPITAL STRUCTURE

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

Preferred Stock

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

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

Common Stock

See subsequent events related to Common Stock on Note 18.

Warrants

PITA, NRNS and XLR8 are affiliates of the Company.

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


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

SHARE REPURCHASE PROGRAM

The Company purchased under the share repurchase program 362,793 shares of common stock for a net cost of $396,780 for the nine months ended September 30, 2024.

- Definition

The entire disclosure for equity.

+ References

+ Details

PROMISSORY NOTES-RELATED PARTIES - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Jun. 29, 2023	Feb. 02, 2022	Feb. 01, 2022	Jan. 25, 2019
Related Party Transaction [Line Items]
Interest paid			$ 14,759,775	$ 12,811,332
Related Party
Related Party Transaction [Line Items]
Unamortized issuance costs					$ 917,581
Related Party \| 122 Partners Note \| FlexShopper, LLC
Related Party Transaction [Line Items]
Principal amount								$ 1,000,000
Interest paid		$ 58,020		163,183
Interest expense, debt		40,335		145,357
Related Party \| NRNS Note \| FlexShopper, LLC
Related Party Transaction [Line Items]
Principal amount	$ 3,750,000		3,750,000			$ 11,000,000	$ 3,750,000
Interest paid	534,030	585,334	1,664,568	1,715,838
Interest expense, debt	$ 532,782	$ 587,230	$ 1,638,792	$ 1,716,217
Interest rate	19.21%		19.21%

EQUITY COMPENSATION PLANS - Schedule of Activity in Performance Share Units (Details) - Performance Share Units - $ / shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Number of performance share units
Beginning balance, non-vested (in shares)	1,250,000	790,327
Exercised/Released (in shares)	(312,501)
Granted (in shares)		1,250,000
Forfeited/unearned (in shares)		(790,327)
Ending balance, non-vested (in shares)	937,499	1,250,000
Weighted average grant date fair value
Beginning balance, non-vested (in dollars per share)	$ 0.78	$ 1.53
Exercised/Released (in dollars per share)	0.78
Granted (in dollars per share)		0.78
Forfeited/unearned (in dollars per share)		1.53
Ending balance, non-vested (in dollars per share)	$ 0.78	$ 0.78

BASIS OF PRESENTATION	9 Months Ended
BASIS OF PRESENTATION	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	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.

LEASES - Schedule of Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Leases [Abstract]
Cash payments for operating leases	$ 320,471	$ 311,137
Cash payments for finance leases	$ 4,782	$ 7,308

PROMISSORY NOTES-RELATED PARTIES - Schedule of Amounts Payable Under the Promissory Notes (Details) - Related Party	Sep. 30, 2024 USD ($)
Debt Principal
2024	$ 0
2025	10,750,000
Interest
2024	172,848
2025	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Concerning Loan Receivables at Fair Value (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Aggregate fair value of loan receivables that are 90 days or more past due	$ 39,728,088	$ 27,828,083
Unpaid principal balance of loan receivables that are 90 days or more past due	77,354,984	29,304,704
Aggregate fair value of loan receivables in non-accrual status	$ 39,906,943	$ 27,764,926

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Lease Receivables Balances (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Lease receivables	$ 104,879,703	$ 64,749,918
Allowance for doubtful accounts	(38,698,232)	(19,954,828)
Lease receivables, net	$ 66,181,471	$ 44,795,090

EQUITY COMPENSATION PLANS (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Share-Based Payment Arrangement, Expensed and Capitalized, Amount

Stock-based compensation expense included the following components:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Stock options	$	81,695	$	242,180	$	242,602	$	1,047,324
Performance share units	75,227		229,639		286,318		289,044
Total stock-based compensation	$	156,922	$	471,819	$	528,920	$	1,336,368

Schedule of Weighted Average of Stock Options Granted

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


	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023
Exercise price	$	1.03		$	0.80
Expected life	4 years			6 years
Expected volatility	69		%	95		%
Dividend yield	0		%	0		%
Risk-free interest rate	3.55		%	3.59		%

Schedule of Activity in Stock Option

Activity in stock options for the nine month periods ended September 30, 2024 and September 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	677,500	$	1.03
Exercised/Released	-
Canceled/ Forfeited	(1,500)	0.79			480
Expired	(55,000)	8.00			-
Outstanding at September 30, 2024	5,073,447	$	1.43	6.46	$	525,296
Vested and exercisable at September 30, 2024	3,660,278	$	1.57	6.46	$	393,901

Outstanding at January 1, 2023	3,919,228	$	1.97		$	52,223
Granted	1,596,567	0.80			75
Exercised	(1,500)	0.79			345
Canceled/ Forfeited	(1,105,900)	1.91
Outstanding at September 30, 2023	4,408,395	$	1.56	7.56	$	561,402
Vested and exercisable at September 30, 2023	3,183,408	$	1.74	7.12	$	328,031

Share-Based Payment Arrangement, Performance Shares, Activity

Activity in performance share units for the nine months ended September 30, 2024 and September 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 September 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 September 30, 2023	1,250,000	$	0.78

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2024	Dec. 31, 2023
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
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, and net of unamortized issuance costs of $305,860 at September 30, 2024	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
Promissory notes to related parties, net of unamortized issuance costs of $649,953 at December 31, 2023 and net of current portion	0	10,100,047
Lease liabilities, net of current portion	1,111,740	1,321,578
Total liabilities	157,453,187	127,259,604
STOCKHOLDERS’ EQUITY
Common stock, $0.0001 par value - authorized 40,000,000 shares, issued 21,988,711 shares at September 30, 2024 and 21,752,304 shares at December 31, 2023	2,200	2,176
Treasury shares, at cost- 526,822 shares at September 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
Total liabilities and stockholders' equity	187,261,759	156,490,377
2024 Credit Agreement
CURRENT LIABILITIES:
Loans payable	130,274,365	96,384,220
Basepoint Credit Agreement
CURRENT LIABILITIES:
Loans payable	7,348,492	7,319,641
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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Loans Receivable - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 35,794,290	$ 32,932,504
Purchases of loan participation	1,058,998	389,949
Obligation of loan participation	0	(12,931)
Loan originations	39,193,233	57,554,746
Interest and fees	8,527,443	14,801,188
Collections	(47,564,200)	(80,089,020)
Net charge off	(2,833,156)	(11,041,155)
Net change in fair value	12,939,532	21,259,009
Ending balance	$ 47,116,140	$ 35,794,290

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Net Lease Merchandise Balances (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Lease merchandise at cost	$ 48,382,621	$ 49,687,498
Accumulated depreciation and impairment reserve	(24,295,611)	(20,556,058)
Lease merchandise, net	$ 24,087,010	$ 29,131,440

INCOME TAXES (Details)	9 Months Ended
INCOME TAXES (Details)	Sep. 30, 2024
Income Tax Disclosure [Abstract]
Income tax rate, percentage	28.19%

LEASES - Narrative (Details)	3 Months Ended		9 Months Ended
LEASES - Narrative (Details)	Sep. 30, 2024 USD ($) leaseAgreement	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) leaseAgreement	Sep. 30, 2023 USD ($)	Dec. 03, 2022 acquiredLease	Sep. 30, 2021 USD ($) people	Jan. 31, 2019 USD ($) ft² additionalTerm
Lessee, Lease, Description [Line Items]
Lease cost	$ 94,915	$ 96,453	$ 289,426	$ 290,964
Office Space in Boca Raton, FL
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term							108 months
Lessee, operating lease, number of renewal term options \| additionalTerm							1
Lessee, operating lease, renewal term							5 years
Area of space leased \| ft²							21,622
Lessee, operating lease, monthly rent							$ 31,500
Lessee, operating lease, annual increase in monthly rent, percentage							3.00%
Office Space in Atlanta, GA
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term						12 months
Lessee, operating lease, renewal term						12 months
Lessee, operating lease, monthly rent						$ 8,800
Number of people using leased space \| people						18
Storefront Lease Agreements Acquired
Lessee, Lease, Description [Line Items]
Number of lease agreements owned \| leaseAgreement	34		34
Average monthly rent	$ 1,800		$ 1,800
Revolution Transaction \| Storefront Lease Agreements Acquired
Lessee, Lease, Description [Line Items]
Lease agreements acquired \| acquiredLease					22

PROMISSORY NOTES-RELATED PARTIES

9 Months Ended

Sep. 30, 2024

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 $58,020 and $163,183 for the three and nine months ended September 30, 2023, respectively.

Interest expensed for the 122 Partner Note $40,335 and $145,357 for the three and nine months ended September 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 September 30, 2024, amounts outstanding under the NRNS Note bear interest at a rate of 19.21%. 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 $534,030 and $1,664,568 for the three and nine months ended September 30, 2024, respectively, and $585,334 and $1,715,838 for the three and nine months ended September 30, 2023, respectively.

Interest expensed for the NRNS Note was $532,782 and $1,638,792 for the three and nine months ended September 30, 2024, respectively, and $587,230 and $1,716,217 for the three and nine months ended September 30, 2023, respectively.

Amounts payable under the promissory notes are as follows:


	Debt Principal		Interest
2024	$	-	$	172,848
2025	$	10,750,000	$	-

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-6

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

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

+ Details

PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Property and Equipment [Line Items]
Property and equipment, gross	$ 35,834,687	$ 30,945,301
Less: accumulated depreciation and amortization	(26,339,495)	(21,636,442)
Property and equipment, net	9,495,192	9,308,859
Furniture, fixtures and vehicle
Property and Equipment [Line Items]
Property and equipment, gross	$ 400,131	395,867
Website and internal use software
Property and Equipment [Line Items]
Estimated Useful Lives	3 years
Property and equipment, gross	$ 29,700,480	25,786,319
Computers and software
Property and Equipment [Line Items]
Property and equipment, gross	$ 5,734,076	$ 4,763,115
Minimum
Property and Equipment [Line Items]
Estimated Useful Lives	2 years
Minimum \| Furniture, fixtures and vehicle
Property and Equipment [Line Items]
Estimated Useful Lives	2 years
Minimum \| Computers and software
Property and Equipment [Line Items]
Estimated Useful Lives	3 years
Maximum
Property and Equipment [Line Items]
Estimated Useful Lives	7 years
Maximum \| Furniture, fixtures and vehicle
Property and Equipment [Line Items]
Estimated Useful Lives	5 years
Maximum \| Computers and software
Property and Equipment [Line Items]
Estimated Useful Lives	7 years

LOAN PAYABLE UNDER CREDIT AGREEMENT - Narrative (Details)		1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 27, 2024 USD ($) monthlyInstallment	Sep. 30, 2022	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Credit Agreement
Debt Instrument [Line Items]
Basis spread on variable rate		11.00%
2024 Credit Agreement
Debt Instrument [Line Items]
Unamortized issuance costs			$ 1,142,325		$ 1,142,325		$ 70,780
2024 Credit Agreement \| Line of Credit
Debt Instrument [Line Items]
Basis spread on variable rate	9.00%
Line of credit facility, maximum borrowing capacity	$ 150,000,000
Payment term	1 year
Period following commitment termination date	12 months
Lender fee percentage	1.00%
Number of monthly installments \| monthlyInstallment	12
Interest rate			14.21%		14.21%
Proceeds from long-term lines of credit			$ 12,600,000	$ 5,050,000	$ 34,961,690	$ 7,800,000
Repayments of long-term lines of credit			0	0	0	2,795,000
Interest expense, debt			4,573,654	$ 3,503,486	12,996,319	$ 10,115,009
Long-term line of credit			131,416,690		131,416,690		96,455,000
Unamortized issuance costs			$ 1,142,325		$ 1,142,325		$ 70,780
Debt instrument, term	1 year
WE 2014-1, LLC \| Credit Agreement
Debt Instrument [Line Items]
Commitment loan percentage		100.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Schedule of Lease Receivables Balances

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


	September 30, 2024		December 31, 2023

Lease receivables	$	104,879,703	$	64,749,918
Allowance for doubtful accounts	(38,698,232)		(19,954,828)
Lease receivables, net	$	66,181,471	$	44,795,090

Schedule of Lease Receivables Balances Charged Off Against the Allowance


	Nine Months Ended September 30, 2024		Year Ended December 31, 2023
Beginning balance	$	19,954,828	$	13,078,800
Provision	25,373,485		42,505,647
Accounts written off	(6,630,081)		(35,629,619)
Ending balance	$	38,698,232	$	19,954,828

Schedule of Net Lease Merchandise Balances

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


	September 30, 2024		December 31, 2023
Lease merchandise at cost	$	48,382,621	$	49,687,498
Accumulated depreciation and impairment reserve	(24,295,611)		(20,556,058)
Lease merchandise, net	$	24,087,010	$	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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Lease billings and accruals	$	36,381,080	$	31,266,666	$	106,352,849	$	98,023,406
Provision for doubtful accounts	(8,083,009)		(10,038,122)		(25,373,485)		(32,123,950)
Gain on sale of lease receivables	15,791		(146,345)		77,225		2,803,745
Lease placement collections	50,328		-		215,384		-
Lease revenues and fees	$	28,364,190	$	21,082,199	$	81,271,973	$	68,703,201

Schedule of Conversions of Stock

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


	September 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	5,073,447	5,435,572
Common Stock Warrants	2,255,184	2,255,184
Performance Share Units	937,499	1,250,000
	14,337,056	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 nine months ended September 30, 2024 and 2023:


	Nine Months Ended September 30,
	2024		2023
Numerator
Net income/ (loss)	$	549,147	$	(4,587,769)
Series 2 Convertible Preferred Stock dividends	(3,337,600)		(3,034,182)
Net loss attributable to common and Series 1 Convertible Preferred Stock	(2,788,453)		(7,621,951)
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	(2,788,453)		(7,621,951)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends	-		-
Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS	$	(2,788,453)	$	(7,621,951)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS	21,547,702		21,740,027
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	21,547,702		21,740,027
Basic EPS	$	(0.13)	$	(0.35)
Diluted EPS	$	(0.13)	$	(0.35)

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


	Three Months Ended September 30,
	2024		2023
Numerator
Net income	$	2,366,384	$	940,101
Series 2 Convertible Preferred Stock dividends	(1,176,402)		(1,069,456)
Net income/ (loss) attributable to common and Series 1 Convertible Preferred Stock	1,189,982		(129,355)
Net income attributable to Series 1 Convertible Preferred Stock	(24,435)		-
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock	12,147		-
Net income/ (loss) attributable to common shares- Numerator for basic EPS	1,177,694		(129,355)
Effect of dilutive securities:
Series 2 Convertible Preferred Stock dividends	-		-
Net income/ (loss) attributable to common shares after assumed conversions – Numerator for diluted EPS	$	1,177,694	$	(129,355)
Denominator
Weighted average of common shares outstanding- Denominator for basic EPS	21,586,935		21,716,852
Effect of dilutive securities
Series 2 Convertible Preferred Stock	-		-
Series 1 Convertible Preferred Stock	225,231		-
Common stock options and performance share units	419,622		-
Common stock warrants	-		-
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator for diluted EPS	22,231,788		21,716,852
Basic EPS	$	0.05	$	(0.01)
Diluted EPS	$	0.05	$	(0.01)

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 September 30, 2024 and December 31, 2023 is as follows:


	Fair Value Measurement Using						Carrying Amount		Unpaid Principal Balance
Financial instruments – As of September 30, 2024 (1)	Level 1		Level 2		Level 3		Carrying Amount		Unpaid Principal Balance
Loan receivables at fair value	$	-	$	-	$	47,116,140	$	47,116,140	$	85,301,661


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

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


	Nine Months Ended September 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	39,193,233		57,554,746
Interest and fees(1)	8,527,443		14,801,188
Collections	(47,564,200)		(80,089,020)
Net charge off (1)	(2,833,156)		(11,041,155)
Net change in fair value(1)	12,939,532		21,259,009
Ending balance	$	47,116,140	$	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


	September 30, 2024						December 31, 2023
	Minimum		Maximum		Weighted Average(2)		Minimum		Maximum		Weighted Average
Estimated losses(1)	0	%	93.9	%	60.6	%	0	%	92.5	%	28.9	%
Servicing costs	-		-		4.1	%	-		-		4.7	%
Discount rate	-		-		20.3	%	-		-		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 September 30, 2024 and December 31, 2023 concerning loan receivables at fair value are as follows:


	September 30, 2024		December 31, 2023
Aggregate fair value of loan receivables that are 90 days or more past due	$	39,728,088	$	27,828,083
Unpaid principal balance of loan receivables that are 90 days or more past due	$	77,354,984	$	29,304,704
Aggregate fair value of loan receivables in non-accrual status	$	39,906,943	$	27,764,926

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Lessor Revenues and Fees (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Accounting Policies [Abstract]
Lease billings and accruals	$ 36,381,080	$ 31,266,666	$ 106,352,849	$ 98,023,406
Provision for doubtful accounts	(8,083,009)	(10,038,122)	(25,373,485)	(32,123,950)
Gain on sale of lease receivables	15,791	(146,345)	77,225	2,803,745
Lease placement collections	50,328	0	215,384	0
Lease revenues and fees	$ 28,364,190	$ 21,082,199	$ 81,271,973	$ 68,703,201

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Number of Common Shares Issuable Upon Conversion or Exercise (Details) - shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	14,337,056	15,011,682
Series 1 Convertible Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	225,231	225,231
Series 2 Convertible Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	5,845,695	5,845,695
Common Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	5,073,447	5,435,572
Common Stock Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	2,255,184	2,255,184
Performance Share Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	937,499	1,250,000

BUSINESS	9 Months Ended
BUSINESS	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS	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 ($)	3 Months Ended				9 Months Ended
SHARE REPURCHASE PROGRAM (Details) - USD ($)	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Sep. 30, 2024	May 17, 2023
Equity [Abstract]
Share repurchase program, authorized amount (in shares)						$ 2,000,000
Treasury stock acquired (in shares)					362,793
Treasury stock, value, acquired	$ 195,974	$ 194,708	$ 6,098	$ 100,225	$ 396,780

EQUITY COMPENSATION PLANS - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Compensation expense		$ 156,922	$ 471,819	$ 528,920	$ 1,336,368
Weighted average grant date fair value of options granted (in dollars per share)				$ 0.56	$ 0.61
Stock options
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Shares remained available for issuance (in shares)		1,474,461		1,474,461
Compensation expense		$ 81,695	242,180	$ 242,602	$ 1,047,324
Performance Share Units
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Compensation expense		75,227	$ 229,639	$ 286,318	$ 289,044
Vested during period (in shares)				312,501
2023 Performance Share Units
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Earned during period (in shares)	1,250,000
Vested during period (in shares)	312,501
Options & Performance Share Units (PSUs)
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Unrecognized compensation cost related to non-vested options		$ 1,033,134		$ 1,033,134
Weighted average period				2 years 2 months 8 days
Minimum \| Performance Share Units
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Shares potentially issuable in period (in shares)				0
Maximum \| Performance Share Units
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Shares potentially issuable in period (in shares)				1,250,000

REVOLUTION TRANSACTION (Details) - USD ($)		12 Months Ended
REVOLUTION TRANSACTION (Details) - USD ($)	Dec. 03, 2022	Dec. 31, 2023	Sep. 30, 2024
Business Acquisition [Line Items]
Change in fair value of promissory note		$ 3,678,689
Revolution Transaction
Business Acquisition [Line Items]
Bargain purchase, gain recognized, amount	$ 14,461,274
Seller Note \| Revolution Transaction
Business Acquisition [Line Items]
Principal amount	5,000,000
Interest rate			8.00%
Long-term debt, fair value	$ 3,421,991

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2024
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 September 30, 2024 and December 31, 2023, the Company had no cash equivalents.
Lease Revenue Recognition & Retail 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 – 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 Accounting Standard Codification ("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. 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 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.
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.
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.
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 $451,555 for the three and nine months ended September 30, 2024, respectively, and $70,368 and $211,104 for the three and nine months ended September 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 $344,093 for the three and nine months ended September 30, 2024, respectively, and $114,698 and $152,930 for the three and nine months ended September 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 $28,851 for the three and nine months ended September 30, 2024, respectively, was $9,617 and $12,823 for the three and nine months ended September 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.
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.
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.
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 $391,431 and $1,335,743 for the three and nine months ended September 30, 2024, respectively, and $227,393 and $570,820 for the three and nine months ended September 30, 2023, respectively. Capitalized data costs amortization expense was $387,941 and $1,104,333 for the three and nine months ended September 30, 2024, respectively, and $250,376 and $704,543 for the three and nine months ended September 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.
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.
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 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.
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 September 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.

SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands	Oct. 25, 2024	Oct. 28, 2024	Oct. 07, 2024	Sep. 30, 2024	Dec. 31, 2023	May 17, 2023
Subsequent Event [Line Items]
Common stock, par value (in dollars per share)				$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)				40,000,000	40,000,000
Share repurchase program, authorized amount (in shares)						$ 2,000
Series 2 Convertible Preferred Stock
Subsequent Event [Line Items]
Preferred stock, liquidation preference, value				$ 44,200
Subsequent Event
Subsequent Event [Line Items]
Common stock, shares authorized (in shares)			100,000,000
Increase in capital shares reserved for future issuance (in shares)			3,000,000
Capital shares reserved for future issuance (in shares)			11,057,000
Subsequent Event \| Rights Offering
Subsequent Event [Line Items]
Rights offering, authorized amount (in shares)		35,000,000
Number of securities called by each right (in shares)		1
Rights offering, rights issued per transaction (in shares)		3
Subsequent Event \| Option
Subsequent Event [Line Items]
Increase in capital shares reserved for future issuance (in shares)			3,000,000
Subsequent Event \| Series 2 Convertible Preferred Stock
Subsequent Event [Line Items]
Share repurchase program, authorized (in shares)	20,000
Share repurchase program, authorized amount, percentage of total shares	91.00%
Convertible preferred stock, shares issued upon conversion (in shares)	266.2942
Convertible preferred stock, shares reserved for future issuance (in shares)	5,325,888
Shares issued, price per share (in dollars per share)	$ 1,000
Preferred stock, convertible, conversion price (in dollars per share)	$ 3.76
Convertible preferred stock, increase in liquidation preference, annual rate	10.00%
Convertible preferred stock, purchase price, percentage of current liquidation preference	50.00%
Share repurchase program, period following date of agreement	12 months
Share repurchase program, true-up payment, discount	8.30%
Share repurchase program, true-up payment, discount, period following closing	30 days
Share repurchase program, required payment, per share amount on share increase, maximum (in dollars per share)	$ 4.00
Share repurchase program, required payment, percent of award, maximum	18.00%
Subsequent Event \| Series 2 Convertible Preferred Stock \| Rights Offering
Subsequent Event [Line Items]
Rights offering, proceeds to be used to fund share repurchase program, percentage		90.00%
Subsequent Event \| Minimum \| Series 2 Convertible Preferred Stock
Subsequent Event [Line Items]
Preferred stock, liquidation preference, value	$ 20,250
Subsequent Event \| Maximum \| Series 2 Convertible Preferred Stock
Subsequent Event [Line Items]
Preferred stock, liquidation preference, value	$ 22,500

COMMITMENTS	9 Months Ended
COMMITMENTS	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS	COMMITMENTS The Company does not have any commitments other than real property leases (Note 4).

INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Asset Impairment [Abstract]

Schedule of Intangible Assets

The following table provides a summary of our intangible assets:


	September 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		(2,336,437)		10,407,930
Liberty Loan brand	10 years	340,218		(62,296)		277,922
Non-compete agreements	10 years	86,113		(15,990)		70,123
Non contractual customer relationships	5 years	1,952,371		(716,119)		1,236,252
Customer list	3 years	184,825		(112,934)		71,891
		$	15,338,654	$	(3,274,536)	$	12,064,118


	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 September 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 (three months remaining)	442,290
2025	1,764,026
2026	1,707,552
2027	1,675,012
2028	1,317,072
Total	$	6,905,952

Condensed Consolidated Statements of Changes in Stockholders’ Equity - USD ($)	Total	Common Stock	Treasury Stock	Additional Paid in Capital	Accumulated Deficit	Series 1 Convertible Preferred Stock Preferred Stock	Series 2 Convertible Preferred Stock Preferred Stock
Preferred stock, beginning balance (in shares) at Dec. 31, 2022						170,332	21,952
Beginning balance at Dec. 31, 2022	$ 31,034,673	$ 2,176		$ 39,819,420	$ (31,590,583)	$ 851,660	$ 21,952,000
Common stock, beginning balance (in shares) at Dec. 31, 2022		21,750,804
Beginning balance, treasury stock (in shares) at Dec. 31, 2022
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Provision for compensation expense related to stock-based compensation	420,748			420,748
Exercise of stock options into common stock (in shares)		1,500
Exercise of stock options into common stock	1,185			1,185
Net income/ (loss)	(230,215)				(230,215)
Preferred stock, ending balance (in shares) at Mar. 31, 2023						170,332	21,952
Ending balance at Mar. 31, 2023	31,226,391	$ 2,176	$ 0	40,241,353	(31,820,798)	$ 851,660	$ 21,952,000
Common stock, ending balance (in shares) at Mar. 31, 2023		21,752,304
Ending balance, treasury stock (in shares) at Mar. 31, 2023			0
Preferred stock, beginning balance (in shares) at Dec. 31, 2022						170,332	21,952
Beginning balance at Dec. 31, 2022	31,034,673	$ 2,176		39,819,420	(31,590,583)	$ 851,660	$ 21,952,000
Common stock, beginning balance (in shares) at Dec. 31, 2022		21,750,804
Beginning balance, treasury stock (in shares) at Dec. 31, 2022
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income/ (loss)	(4,587,769)
Preferred stock, ending balance (in shares) at Sep. 30, 2023						170,332	21,952
Ending balance at Sep. 30, 2023	28,601,812	$ 2,176	$ (100,225)	42,074,553	(36,178,352)	$ 851,660	$ 21,952,000
Common stock, ending balance (in shares) at Sep. 30, 2023		21,752,304
Ending balance, treasury stock (in shares) at Sep. 30, 2023			100,775
Preferred stock, beginning balance (in shares) at Mar. 31, 2023						170,332	21,952
Beginning balance at Mar. 31, 2023	31,226,391	$ 2,176	$ 0	40,241,353	(31,820,798)	$ 851,660	$ 21,952,000
Common stock, beginning balance (in shares) at Mar. 31, 2023		21,752,304
Beginning balance, treasury stock (in shares) at Mar. 31, 2023			0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Provision for compensation expense related to stock-based compensation	443,800			443,800
Extension of warrants	917,581			917,581
Net income/ (loss)	(5,297,655)				(5,297,655)
Preferred stock, ending balance (in shares) at Jun. 30, 2023						170,332	21,952
Ending balance at Jun. 30, 2023	27,290,117	$ 2,176	$ 0	41,602,734	(37,118,453)	$ 851,660	$ 21,952,000
Common stock, ending balance (in shares) at Jun. 30, 2023		21,752,304
Ending balance, treasury stock (in shares) at Jun. 30, 2023			0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Provision for compensation expense related to stock-based compensation	471,819			471,819
Purchases of treasury stock (in shares)			100,775
Purchases of treasury stock	(100,225)		$ (100,225)
Net income/ (loss)	940,101				940,101
Preferred stock, ending balance (in shares) at Sep. 30, 2023						170,332	21,952
Ending balance at Sep. 30, 2023	28,601,812	$ 2,176	$ (100,225)	42,074,553	(36,178,352)	$ 851,660	$ 21,952,000
Common stock, ending balance (in shares) at Sep. 30, 2023		21,752,304
Ending balance, treasury stock (in shares) at Sep. 30, 2023			100,775
Preferred stock, beginning balance (in shares) at Dec. 31, 2023						170,332	21,952
Beginning balance at Dec. 31, 2023	$ 29,230,773	$ 2,176	$ (166,757)	42,415,894	(35,824,200)	$ 851,660	$ 21,952,000
Common stock, beginning balance (in shares) at Dec. 31, 2023		21,752,304
Beginning balance, treasury stock (in shares) at Dec. 31, 2023	164,029		164,029
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Provision for compensation expense related to stock-based compensation	$ 217,125			217,125
Purchases of treasury stock (in shares)			5,418
Purchases of treasury stock	(6,098)		$ (6,098)
Net income/ (loss)	(214,179)				(214,179)
Preferred stock, ending balance (in shares) at Mar. 31, 2024						170,332	21,952
Ending balance at Mar. 31, 2024	29,227,621	$ 2,176	$ (172,855)	42,633,019	(36,038,379)	$ 851,660	$ 21,952,000
Common stock, ending balance (in shares) at Mar. 31, 2024		21,752,304
Ending balance, treasury stock (in shares) at Mar. 31, 2024			169,447
Preferred stock, beginning balance (in shares) at Dec. 31, 2023						170,332	21,952
Beginning balance at Dec. 31, 2023	$ 29,230,773	$ 2,176	$ (166,757)	42,415,894	(35,824,200)	$ 851,660	$ 21,952,000
Common stock, beginning balance (in shares) at Dec. 31, 2023		21,752,304
Beginning balance, treasury stock (in shares) at Dec. 31, 2023	164,029		164,029
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchases of treasury stock (in shares)	362,793
Purchases of treasury stock	$ (396,780)
Net income/ (loss)	549,147
Preferred stock, ending balance (in shares) at Sep. 30, 2024						170,332	21,952
Ending balance at Sep. 30, 2024	$ 29,808,572	$ 2,200	$ (563,537)	42,841,302	(35,275,053)	$ 851,660	$ 21,952,000
Common stock, ending balance (in shares) at Sep. 30, 2024		21,988,711
Ending balance, treasury stock (in shares) at Sep. 30, 2024	526,822		526,822
Preferred stock, beginning balance (in shares) at Mar. 31, 2024						170,332	21,952
Beginning balance at Mar. 31, 2024	$ 29,227,621	$ 2,176	$ (172,855)	42,633,019	(36,038,379)	$ 851,660	$ 21,952,000
Common stock, beginning balance (in shares) at Mar. 31, 2024		21,752,304
Beginning balance, treasury stock (in shares) at Mar. 31, 2024			169,447
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Provision for compensation expense related to stock-based compensation	154,873			154,873
Purchases of treasury stock (in shares)			176,811
Purchases of treasury stock	(194,708)		$ (194,708)
Net income/ (loss)	(1,603,058)				(1,603,058)
Vesting of performance share units, net of share withheld for employee taxes (in shares)		236,407
Vesting of performance share units, net of share withheld for employee taxes	(103,488)	$ 24		(103,512)
Preferred stock, ending balance (in shares) at Jun. 30, 2024						170,332	21,952
Ending balance at Jun. 30, 2024	27,481,240	$ 2,200	$ (367,563)	42,684,380	(37,641,437)	$ 851,660	$ 21,952,000
Common stock, ending balance (in shares) at Jun. 30, 2024		21,988,711
Ending balance, treasury stock (in shares) at Jun. 30, 2024			346,258
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Provision for compensation expense related to stock-based compensation	156,922			156,922
Purchases of treasury stock (in shares)			180,564
Purchases of treasury stock	(195,974)		$ (195,974)
Net income/ (loss)	2,366,384				2,366,384
Preferred stock, ending balance (in shares) at Sep. 30, 2024						170,332	21,952
Ending balance at Sep. 30, 2024	$ 29,808,572	$ 2,200	$ (563,537)	$ 42,841,302	$ (35,275,053)	$ 851,660	$ 21,952,000
Common stock, ending balance (in shares) at Sep. 30, 2024		21,988,711
Ending balance, treasury stock (in shares) at Sep. 30, 2024	526,822		526,822

LEASES

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

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 September 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	September 30, 2024		December 31, 2023
Assets
Operating Lease Asset	Right of use asset, net	$	1,093,551	$	1,233,538
Finance Lease Asset	Right of use asset, net	-		3,472
Total Lease Assets		$	1,093,551	$	1,237,010

Liabilities
Operating Lease Liability – current portion	Current Lease Liabilities	$	275,029	$	240,444
Finance Lease Liability – current portion	Current Lease Liabilities	—		4,608
Operating Lease Liability – net of current portion	Long Term Lease Liabilities	1,111,740		1,321,578
Total Lease Liabilities		$	1,386,769	$	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	%	4.0
Finance Leases	13.39	%	0

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 $94,915 and $289,426 for the three and nine months ended September 30, 2024, respectively, and $96,453 and $290,964 for the three and nine months ended September 30, 2023, respectively.

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


	Nine Months Ended September 30,
	2024		2023
Cash payments for operating leases	$	320,471	$	311,137
Cash payments for finance leases	4,782		7,308


	Operating Leases
2024	$	109,663
2025	443,038
2026	456,330
2027	470,019
2028 and thereafter	303,574
Total undiscounted cash flows	1,782,624
Less: interest	(395,855)
Present value of lease liabilities	$	1,386,768

LEASES

Lease Commitments

Supplemental balance sheet information related to leases is as follows:


	Balance Sheet Classification	September 30, 2024		December 31, 2023
Assets
Operating Lease Asset	Right of use asset, net	$	1,093,551	$	1,233,538
Finance Lease Asset	Right of use asset, net	-		3,472
Total Lease Assets		$	1,093,551	$	1,237,010

Liabilities
Operating Lease Liability – current portion	Current Lease Liabilities	$	275,029	$	240,444
Finance Lease Liability – current portion	Current Lease Liabilities	—		4,608
Operating Lease Liability – net of current portion	Long Term Lease Liabilities	1,111,740		1,321,578
Total Lease Liabilities		$	1,386,769	$	1,566,630

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	%	4.0
Finance Leases	13.39	%	0

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


	Nine Months Ended September 30,
	2024		2023
Cash payments for operating leases	$	320,471	$	311,137
Cash payments for finance leases	4,782		7,308


	Operating Leases
2024	$	109,663
2025	443,038
2026	456,330
2027	470,019
2028 and thereafter	303,574
Total undiscounted cash flows	1,782,624
Less: interest	(395,855)
Present value of lease liabilities	$	1,386,768

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2024
Income Tax Disclosure [Abstract]
INCOME TAXES	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 nine months ended September 30, 2024 was approximately 28.19%. 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 September 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
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 12C
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Section 50
-Paragraph 12B
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 20
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-Publisher FASB
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 10
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-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 14
-Publisher FASB
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 10
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-Section 50
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-Publisher FASB
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (b)
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Paragraph 2
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-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment consist of the following:


	Estimated Useful Lives	September 30, 2024		December 31, 2023
Furniture, fixtures and vehicle	2-5 years	$	400,131	$	395,867
Website and internal use software	3 years	29,700,480		25,786,319
Computers and software	3-7 years	5,734,076		4,763,115
		35,834,687		30,945,301
Less: accumulated depreciation and amortization		(26,339,495)		(21,636,442)
		$	9,495,192	$	9,308,859

Depreciation and amortization expense for property and equipment was $1,605,989 and $4,703,053 for the three and nine months ended September 30, 2024, respectively, and $1,271,216 and $3,641,634 for the three and nine months ended September 30, 2023, respectively.