UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Amendment No. 1
For the fiscal year ended
or
For the transition period from ________ to ________
Commission File Number:
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including
area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer: | ☐ | Accelerated filer: | ☐ |
| ☒ | Smaller reporting company: | ||
| Emerging growth company: |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
The aggregate market value of the voting and non-voting
common equity held by non-affiliates of the Registrant, as of the last business day of the Registrant’s most recently completed
second fiscal quarter, was approximately $
The number
of shares outstanding of the Registrant’s common stock, as of April 3, 2024, was
Documents incorporated by reference: None
| Auditor Name: | Auditor Location: | Auditor Firm ID: |
Explanatory Note
This Amendment No. 1 on Form 10-K/A amends the FlexShopper, Inc. (“FlexShopper” or the “Company”) Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission (“SEC”) on April 1, 2024 (the “Original Filing”). We are filing this Amendment No. 1 to correct the basic and diluted weighted average common shares and the basic and diluted loss per common shares as of December 31, 2023 in the Consolidated Statements of Operations and in Note 2 to the Consolidated Financial Statement, as those numbers were reported inaccurately in the Original Filing. As required by Rule 12b-15 under the Securities Exchange Act of 1934, new certifications of our principal executive officer and principal financial officer are being filed as exhibits to this Amendment No. 1 on Form 10-K/A.
Except as described above, no other changes have been made to the Original Filing. The Original Filing continues to speak as of the date of the Original Filing, and we have not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing of the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with our filings with the SEC subsequent to the date of the Original Filing.
Table of Contents
| Page | |||
| PART II | |||
| Item 8. | Financial Statements and Supplementary Data | F-1 | |
| PART IV | |||
| Item 15. | Exhibits and Financial Statement Schedules | 1 | |
| SIGNATURES | 2 |
i
PART II
Item 8. Financial Statements and Supplementary Data
FLEXSHOPPER, INC.
CONTENTS
| YEARS ENDED DECEMBER 31, 2023 AND 2022 | PAGE | |
| FINANCIAL STATEMENTS | ||
| Report of Independent Registered Public Accounting Firm (PCAOB ID 248) | F-2 | |
| Consolidated Balance Sheets | F-4 | |
| Consolidated Statements of Operations | F-5 | |
| Consolidated Statements of Stockholders’ Equity | F-6 | |
| Consolidated Statements of Cash Flows | F-7 | |
| Notes to Consolidated Financial Statements | F-8 |
F-1
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of
FlexShopper, Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of FlexShopper, Inc. and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Allowance for Doubtful Accounts on Lease Receivables
As described further in Note 2 to the consolidated financial statements, the Company records an allowance on lease receivables with a corresponding reduction to lease revenue and fees. The Company determines the amount of allowance to recognize based upon historical and current customer collections as a portion of its gross customer billings.
The principal consideration for our determination that the allowance on lease receivables is a critical audit matter is the high degree of subjectivity that is involved in evaluating the reasonableness of management’s estimate, including collection rate assumptions used in the allowance model that derive the expected future customer payments.
Our audit procedures related to the allowance for doubtful accounts on lease receivables included the following, among others:
| ● | We obtained an understanding of management’s process and evaluated the design of controls related to the allowance model, including controls over the completeness and accuracy of information used in the model and management review controls over the model. |
| ● | We assessed the reasonableness of the methodology used by management to determine the allowance. |
| ● | We sampled leases and tested the underlying data including the lease amount, lease aging, and completeness and accuracy of the application of lease payments during 2023. |
| ● | We recomputed historical collection rates and the allowance for the year ended December 31, 2023. |
F-2
Loan Receivables at Fair Value
As described further in Note 2 to the consolidated financial statements, the Company records its loan receivables at fair value on a recurring basis with changes in fair value recognized as a component of loan revenues and fees. The Company determines the fair value of loan receivables using a discounted cash flow model based on the estimated amount and timing of expected future cash flows.
The principal consideration for our determination that the fair value measurement of loan receivables is a critical audit matter is the high degree of subjectivity that is involved in evaluating the reasonableness of management’s estimate, including the discount rate, prepayment rate, default rate and loss severity assumptions.
Our audit procedures related to the fair value measurement of loan receivables included the following, among others:
| ● | We obtained an understanding of management’s process and evaluated the design of controls related to the loan receivables valuation model, including controls over the completeness and accuracy of information used in the model and management review controls over the model. |
| ● | We confirmed loan balances with the third-party loan servicer. |
| ● | We sampled loans and tested the underlying data. |
| ● | With the assistance of an internal specialist, we independently determined the fair value measurement of loan receivables as of December 31, 2023 and compared it to management’s fair value measurement for reasonableness. |
Income Taxes
As discussed in Note 2 and Note 10 to the consolidated financial statements, the Company records a valuation allowance to reduce the deferred tax asset when a judgment is made, that is considered more likely than not, that a tax benefit will not be realized. The ultimate realization of the deferred tax asset is dependent upon the generation of future taxable income during the periods in which those temporary differences will become deductible. The Company assesses the need for a valuation allowance by evaluating both positive and negative evidence that exists. We identified the realizability of the federal deferred tax asset to be a critical audit matter.
The principal consideration for our determination that the realizability of the deferred tax asset is a critical audit matter is that the forecast of future taxable income is an accounting estimate subject to a high level of estimation. There is inherent uncertainty and subjectivity related to management’s judgments and assumptions regarding the Company’s future financial performance which is complex in nature and requires significant auditor judgment.
Our audit procedures related to the realizability of the federal deferred tax asset included the following, among others:
| ● | We obtained an understanding of management’s process and evaluated the design of controls related to the realizability of the federal deferred tax asset. |
| ● | With the assistance of an internal specialist, we reviewed the valuation models for reasonableness and tested the assessment of the realizability of the federal deferred tax asset, including testing the calculations related to the potential limitation of tax attributes, and testing the schedule of reversing temporary differences. |
/s/ GRANT THORNTON LLP
We have served as the Company’s auditor since 2022.
Fort Lauderdale, FL
April 1, 2024
F-3
FLEXSHOPPER, INC.
CONSOLIDATED BALANCE SHEETS
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Lease receivables, net | ||||||||
| Loan receivables at fair value | ||||||||
| Prepaid expenses and other assets | ||||||||
| Lease merchandise, net | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Right of use asset, net | ||||||||
| Intangible assets, net | ||||||||
| Other assets, net | ||||||||
| Deferred tax asset, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued payroll and related taxes | ||||||||
| Promissory notes to related parties, including accrued interest | ||||||||
| Accrued expenses | ||||||||
| Lease liability - current portion | ||||||||
| Total current liabilities | ||||||||
| Loan payable under credit agreement to beneficial shareholder, net of unamortized issuance costs of $ | ||||||||
| Promissory notes to related parties, net of unamortized issuance costs of $ | ||||||||
| Promissory note related to acquisition, net of discount of $ | ||||||||
| Loan payable under Basepoint credit agreement, net of unamortized issuance costs of $ | ||||||||
| Purchase consideration payable related to acquisition | ||||||||
| Lease liabilities, net of current portion | ||||||||
| Total liabilities | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Series 1 Convertible Preferred Stock, $ | ||||||||
| Series 2 Convertible Preferred Stock, $ | ||||||||
| Common stock, $ | ||||||||
| Treasury shares, at cost | ( | ) | ||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| $ | $ | |||||||
The accompanying notes to consolidated financial statements are an integral part of these statements.
F-4
FLEXSHOPPER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| For
the years ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenues: | ||||||||
| Lease revenues and fees, net | $ | $ | ||||||
| Loan revenues and fees, net of changes in fair value | ||||||||
| Total revenues | ||||||||
| Costs and expenses: | ||||||||
| Depreciation and impairment of lease merchandise | ||||||||
| Loan origination costs and fees | ||||||||
| Marketing | ||||||||
| Salaries and benefits | ||||||||
| Operating expenses | ||||||||
| Net change in fair value of promissory note related to acquisition | ( | ) | ||||||
| Total costs and expenses | ||||||||
| Operating income/ (loss) | ( | ) | ||||||
| Gain on bargain purchase | ||||||||
| Interest expense including amortization of debt issuance costs | ( | ) | ( | ) | ||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Benefit from income taxes | ||||||||
| Net (loss)/ income | ( | ) | ||||||
| Dividends on Series 2 Convertible Preferred Shares | ||||||||
| Net (loss)/ income attributable to common and Series 1 Convertible Preferred shareholders | $ | ( | ) | $ | ||||
| Basic and diluted (loss)/ income per common share: | ||||||||
| Basic | $ | ( | ) | $ | ||||
| Diluted | $ | ( | ) | $ | ||||
| WEIGHTED AVERAGE COMMON SHARES: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes to consolidated financial statements are an integral part of these statements.
F-5
FLEXSHOPPER, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the years ended December 31, 2023 and 2022
| Series
1 Convertible Preferred Stock | Series
2 Convertible Preferred Stock | Common Stock | Treasury Stock | Additional Paid in | Accumulated | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||||||||
| Balance, January 1, 2022 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||
| Provision for compensation expense related to stock-based compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options into common stock | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||
| Provision for compensation expense related to stock-based compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options into common stock | ||||||||||||||||||||||||||||||||||||||||||||
| Extension of warrants | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Purchases of treasury stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated statements.
F-6
FLEXSHOPPER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2023 and 2022
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss)/ income | $ | ( | ) | $ | ||||
| Adjustments to reconcile net (loss)/ income to net cash used in operating activities: | ||||||||
| Depreciation and impairment of lease merchandise | ||||||||
| Other depreciation and amortization | ||||||||
| Amortization of debt issuance costs | ||||||||
| Amortization of discount on the promissory note related to acquisition | ||||||||
| Compensation expense related to stock-based compensation | ||||||||
| Provision for doubtful accounts | ||||||||
| Interest in kind added to promissory notes balance | ||||||||
| Deferred income tax | ( | ) | ( | ) | ||||
| Net change in fair value of promissory note related to acquisiton | ( | ) | ||||||
| Gain on bargain purchase | ( | ) | ||||||
| Net changes in the fair value of loan receivables at fair value | ( | ) | ||||||
| Changes in operating assets and liabilities, net of effects of acquisition: | ||||||||
| Lease receivables | ( | ) | ( | ) | ||||
| Loan receivables at fair value | ( | ) | ||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Lease merchandise | ( | ) | ( | ) | ||||
| Purchase consideration payable related to acquisition | ||||||||
| Promissory note related to acquisition | ||||||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued payroll and related taxes | ( | ) | ||||||
| Accrued expenses | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Cash acquired in business combination | ||||||||
| Purchases of property and equipment, including capitalized software costs | ( | ) | ( | ) | ||||
| Purchases of data costs | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from loan payable under credit agreement | ||||||||
| Repayment of loan payable under credit agreement | ( | ) | ( | ) | ||||
| Repayment of loan payable under Basepoint credit agreement | ( | ) | ||||||
| Repayment of promissory notes to related parties | ( | ) | ||||||
| Debt issuance related costs | ( | ) | ( | ) | ||||
| Proceeds from exercise of stock options | ||||||||
| Proceeds from promissory notes to related parties | ||||||||
| Principal payment under finance lease obligation | ( | ) | ( | ) | ||||
| Repayment of purchase consideration payable related to acquisition | ( | ) | ||||||
| Repayment of installment loan | ( | ) | ||||||
| Purchases of Treasury Stock | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| (DECREASE)/ INCREASE IN CASH and RESTRICTED CASH | ( | ) | ||||||
| CASH and RESTRICTED CASH, beginning of period | ||||||||
| CASH and RESTRICTED CASH, end of period | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Interest paid | $ | $ | ||||||
| Due date extension of warrants | $ | $ | ||||||
| Noncash investing and financing activities | ||||||||
| Acquisition of loan receivables at fair value | $ | $ | ||||||
| Acquisition of property and equipment | ||||||||
| Acquisition of intangible assets | ||||||||
| Acquisition of purchase consideration payable related to acquisition | ||||||||
| Acquisition of accounts payable | ||||||||
| Acquisition of deferred tax liability | ||||||||
| Issuance of promissory note related to acquisition | ||||||||
The accompanying notes to consolidated financial statements are an integral part of these statements.
F-7
FLEXSHOPPER, INC.
Notes To Consolidated Financial Statements
For the year ended December 30, 2023 and 2022
1. BUSINESS
FlexShopper,
Inc. (the “Company”) is a corporation organized under the laws of the State of Delaware in 2006. The Company owns
In January 2015, in connection with the Credit Agreement entered in March 2015 (see Note 7), FlexShopper 1 LLC and FlexShopper 2 LLC were organized as wholly owned Delaware subsidiaries of FlexShopper LLC to conduct operations. FlexShopper Inc, together with its subsidiaries, are hereafter referred to as “FlexShopper.”
FlexShopper, LLC provides 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.
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.
2. 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 include 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 December 31, 2023 and 2022, the Company had no cash equivalents.
Restricted Cash – The Company classifies all cash whose use is limited by contractual provisions as restricted cash. Restricted cash as of December 31, 2022 consists primarily of cash required by our third-party banking partner to cover obligations related to loan participation.
| December 31, 2023 | December 31, 2022 | |||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash and restricted cash | $ | $ | ||||||
F-8
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.
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.
| December 31, 2023 | December 31, 2022 | |||||||
| Lease receivables | $ | $ | ||||||
| Allowance for doubtful accounts | ( | ) | ( | ) | ||||
| Lease receivables, net | $ | $ | ||||||
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.
| Year Ended
December 31, 2023 | Year Ended
December 31, 2022 | |||||||
| Beginning balance | $ | $ | ||||||
| Provision | ||||||||
| Accounts written off | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
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.
| December 31, 2023 | December 31, 2022 | |||||||
| Lease merchandise at cost | $ | $ | ||||||
| Accumulated depreciation and impairment reserve | ( | ) | ( | ) | ||||
| Lease merchandise, net | $ | $ | ||||||
F-9
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 120 or more days past due. The Company charges-off loans at the earlier of when the loans are determined to be uncollectible or when the loans are 120 days contractually past due. Recoveries on 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” were a gain of $
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 3 to the 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.
| Year
ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Lease billings and accruals | $ | $ | ||||||
| Provision for doubtful accounts | ( | ) | ( | ) | ||||
| Gain on sale of lease receivables | ||||||||
| Lease revenues and fees | $ | $ | ||||||
F-10
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
$
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 $
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 $
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 13). 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
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 definite lives, tests for impairment must be performed if conditions exist that indicate the carrying amount may
not be recoverable. Intangible assets amortization expense was $
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 $
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 $
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. At the beginning of the third quarter of 2021, the Company made several changes including the implementation of a more disciplined process around data procurement and storage. Those improvements triggered a change in the estimate of the probability to provide future economic benefit of some data cost.
Capitalized
data costs amounted to $
Capitalized data costs net of its amortization are included in the 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 years ended December 31, 2023 and 2022, there were no impairments.
Operating Expenses - Operating expenses include corporate overhead expenses such as salaries, stock-based compensation, insurance, occupancy, and other administrative expenses.
F-11
Marketing Costs - Marketing costs, primarily consisting of advertising, are charged to expense as incurred. Direct acquisition costs, primarily consisting of commissions earned based on lease originations, are capitalized and amortized over the life of the lease.
Per Share Data - Per share data is computed by use of the two-class method as a result of outstanding Series 1 Convertible Preferred Stock, which participates in dividends with the common stock and accordingly has participation rights in undistributed earnings as if all such earnings had been distributed during the period (see Note 8). Under such method income available to common shareholders is computed by deducting both dividends declared or, if not declared, accumulated on Series 2 Convertible Preferred Stock from 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.
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Series 1 Convertible Preferred Stock | ||||||||
| Series 2 Convertible Preferred Stock | ||||||||
| Series 2 Convertible Preferred Stock issuable upon exercise of warrants | ||||||||
| Common Stock Options | ||||||||
| Common Stock Warrants | ||||||||
| Performance Share Units | ||||||||
F-12
| Year ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Numerator | ||||||||
| Net (loss)/ income | $ | ( | ) | $ | ||||
| Series 2 Convertible Preferred Stock dividends | ( | ) | ( | ) | ||||
| Net loss attributable to common and Series 1 Convertible Preferred Stock | ( | ) | ||||||
| Net income attributable to Series 1 Convertible Preferred Stock | ( | ) | ||||||
| Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock | ||||||||
| Net (loss)/ income attributable to common shares - Numerator for basic and diluted EPS | $ | ( | ) | $ | ||||
| Denominator | ||||||||
| Weighted average of common shares outstanding- Denominator for basic EPS | ||||||||
| Effect of dilutive securities: | - | - | ||||||
| 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 | ||||||||
| Basic EPS | $ | ( | ) | $ | ||||
| Diluted EPS | $ | ( | ) | $ | ||||
Stock-Based Compensation - The fair value of transactions in which the Company exchanges its equity instruments for employee and non-employee services (share-based payment transactions) is recognized as a compensation expense in the financial statements as services are performed.
Compensation expense for stock options is determined by reference to the fair value of an award on the date of grant and is recognized on a straight-line basis over the vesting period. The Company has elected to use the Black-Scholes-Merton (BSM) pricing model to determine the fair value of all stock option awards.
Compensation expense for performance share units is recognized on an accelerated basis over the vesting period based on the Company’s projected assessment of the level of performance that will be achieved and earned. The fair value of performance share units is based on the fair market value of the Company’s common stock on the date of grant (see Note 9).
Fair Value of Financial Instruments - The carrying value of certain financial instruments such as cash, 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.
F-13
The Company utilizes the fair value option on its entire loan receivables portfolio purchased from its bank partner and for the portfolio acquired in the Revolution Transaction (See Note 13).
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.
| Fair Value Measurement Using | Carrying | |||||||||||||||
| Financial instruments – As of December 31, 2023 (1) | Level 1 | Level 2 | Level 3 | Amount | ||||||||||||
| Loan receivables at fair value | $ | $ | $ | $ | ||||||||||||
| Promissory note related to acquisition | ||||||||||||||||
| Fair Value Measurement Using | Carrying | |||||||||||||||
| Financial instruments – As of December 31, 2022 (1) | Level 1 | Level 2 | Level 3 | Amount | ||||||||||||
| Loan receivables at fair value | $ | $ | $ | $ | ||||||||||||
| Promissory note related to acquisition | ||||||||||||||||
| (1) |
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 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’s 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’s estimates of the rates of return that investors would require when investing in financial instruments with similar risk and return characteristics. |
F-14
| Year
Ended December 31, 2023 | Year
Ended December 31, 2022 | |||||||
| Beginning balance | $ | $ | ||||||
| Purchases of loan participation | ||||||||
| Obligation of loan participation | ( | ) | ||||||
| Purchase of loan portfolio in Revolution Transaction | ||||||||
| Loan originations | ||||||||
| Interest and fees(1) | ||||||||
| Collections | ( | ) | ( | ) | ||||
| Net charge off (1) | ( | ) | ( | ) | ||||
| Net change in fair value(1) | ||||||||
| Ending balance | $ | $ | ||||||
| (1) |
| December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||
| Minimum | Maximum | Weighted Average(2) | Minimum | Maximum | Weighted Average | |||||||||||||||||||
| Estimated losses(1) | % | % | % | % | % | % | ||||||||||||||||||
| Servicing costs | % | % | ||||||||||||||||||||||
| Discount rate | % | % | ||||||||||||||||||||||
| (1) | |
| (2) |
| December 31, 2023 | December 31, 2022 | |||||||
| Aggregate fair value of loan receivables that are 90 days or more past due | $ | $ | ||||||
| Unpaid principal balance of loan receivables that are 90 days or more past due | ||||||||
| Aggregate fair value of loan receivables in non-accrual status | ||||||||
Income Taxes - Deferred tax assets and liabilities are determined based on the estimated future tax effects of net operating loss carryforwards and temporary differences between the tax bases of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records a valuation allowance for its deferred tax assets when management concludes that it is not more likely than not that such assets will be recognized.
The
Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained
on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated
financial statements from such a position are measured based on the largest benefit that has a greater than
Reclassifications
Certain prior year balances have been reclassified to conform with the current year presentation.
F-15
Recent Accounting Pronouncements
In
November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,
which requires enhanced disclosures of significant segment expenses on a quarterly and annual basis and is intended to improve the transparency
of reportable segment disclosures. The adoption of ASU 2023-07 will be required for the Company beginning January 1, 2024. The adoption
of this ASU did not have an impact on our financial statements as the Company has
In December 2023, the FASB issued ASU No. 2023-08, Accounting for and Disclosure of Crypto Assets (Subtopic 350-60). This ASU requires certain crypto assets to be measured at fair value separately in the balance sheet and income statement each reporting period. This ASU also enhances the other intangible asset disclosure requirements. The adoption of ASU 2023-08 will be required for the Company beginning January 1, 2025. The adoption of this ASU will not have an impact on our financial statements as the Company doesn’t have any crypto assets.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of the annual income tax disclosures by requiring specific categories in the income tax rate reconciliation and disaggregation of income taxes paid by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The adoption of ASU 2023-09 will be required for the Company beginning January 1, 2025. We do not believe the adoption of this ASU will have a material impact on our financial statements.
From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that we adopt as of the specified effective date. Unless otherwise discussed, we believe the impact of any other recently issued standards that are not yet effective are either not applicable to us at this time or will not have a material impact on our consolidated financial statements upon adoption.
3. LEASES
Refer to Note 2 to these consolidated financial statements for further information about the Company’s revenue generating activities as a lessor. All the Company’s customer agreements are considered operating leases, and the Company currently does not have any sales-type or direct financing leases 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
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 $
F-16
As
part of the Revolution Transaction (See Note 13), 22 storefront lease agreements were acquired by FlexShopper. Some of those stores were
closed or transferred from franchisees after the Revolution Transaction. As of December 31, 2023, 33 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 $
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.
| Balance Sheet Classification | December 31, 2023 | December 31, 2022 | ||||||||
| Assets | ||||||||||
| Operating Lease Asset | $ | $ | ||||||||
| Finance Lease Asset | ||||||||||
| Total Lease Assets | $ | $ | ||||||||
| Liabilities | ||||||||||
| Operating Lease Liability – current portion | $ | $ | ||||||||
| Finance Lease Liability – current portion | ||||||||||
| Operating Lease Liability – net of current portion | ||||||||||
| Finance Lease Liability – net of current portion | ||||||||||
| Total Lease Liabilities | $ | $ | ||||||||
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.
| Weighted
Average Discount Rate | Weighted
Average Remaining Lease Term (in years) | |||||||
| Operating Leases | % | |||||||
| Finance Leases | % | |||||||
Operating
lease expense is recognized on a straight-line basis over the lease term within operating expenses in the Company’s consolidated
statements of operations. Finance lease expense is recognized over the lease term within interest expense and amortization in the Company’s
consolidated statements of operations. The Company’s total operating and finance lease expense all relate to lease costs and amounted
to $
| Twelve Months ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash payments for operating leases | $ | $ | ||||||
| Cash payments for finance leases | ||||||||
F-17
| Operating Leases | ||||
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 and thereafter | ||||
| Total undiscounted cash flows | ||||
| Less: interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
| Finance Leases | ||||
| 2024 | $ | |||
| Total undiscounted cash flows | ||||
| Less: interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
4. PROPERTY AND EQUIPMENT
| Estimated Useful Lives | December 31, 2023 | December 31, 2022 | ||||||||
| Furniture, fixtures and vehicle | $ | $ | ||||||||
| Website and internal use software | ||||||||||
| Computers and software | ||||||||||
| Less: accumulated depreciation and amortization | ( | ) | ( | ) | ||||||
| $ | $ | |||||||||
Depreciation
and amortization expense for property and equipment was $
5. INTANGIBLE ASSETS
| December 31, 2023 | ||||||||||||||
| Estimated
Useful Life | Gross Carrying Amount | Accumulated
Amortization | Net Carrying
Amount | |||||||||||
| Patent | $ | $ | ( | ) | $ | |||||||||
| Franchisee contract-based agreements | ( | ) | ||||||||||||
| Liberty Loan brand | ( | ) | ||||||||||||
| Non-compete agreements | ( | ) | ||||||||||||
| Non contractual customer relationships | ( | ) | ||||||||||||
| Customer list | ( | ) | ||||||||||||
| $ | $ | ( | ) | $ | ||||||||||
F-18
| December 31, 2022 | ||||||||||||||
| Estimated
Useful Life |
Gross Carrying Amount |
Accumulated
Amortization |
Net Carrying
Amount |
|||||||||||
| Patent | $ | $ | ( |
) | $ | |||||||||
| Franchisee contract-based agreements | ( |
) | ||||||||||||
| Liberty Loan brand | ( |
) | ||||||||||||
| Non-compete agreements | ( |
) | ||||||||||||
| Non contractual customer relationships | ( |
) | ||||||||||||
| Customer list | ( |
) | ||||||||||||
| $ | $ | ( |
) | $ | ||||||||||
Intangible
assets amortization expense was $
| Amortization Expense | ||||
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Total | $ | |||
6. 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 $
Interest
paid for the 122 Partner Note was $
Interest
expensed for the 122 Partner Note was $
F-19
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 $
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 $
Interest
paid for the NRNS Note was $
Interest
expensed for the NRNS Note was $
| Debt
Principal | Interest | |||||||
| 2024 | $ | $ | ||||||
| 2025 | $ | $ | ||||||
7. LOAN PAYABLE UNDER CREDIT AGREEMENT
On
March 6, 2015, FlexShopper, through a wholly-owned subsidiary (“Borrower”), entered into a credit agreement (as amended from
time-to-time, the “Credit Agreement”) with Wells Fargo Bank, National Association as paying agent, various lenders from time
to time party thereto and WE 2014-1, LLC, an affiliate of Waterfall Asset Management, LLC, as administrative agent and lender (“Lender”).
The Borrower is permitted to borrow funds under the Credit Agreement based on FlexShopper’s cash on hand and the Amortized Order
Value of its Eligible Leases (as such terms are defined in the Credit Agreement) less certain deductions described in the Credit Agreement.
Under the terms of the Credit Agreement, subject to the satisfaction of certain conditions, the Borrower may borrow up to $
On
January 29, 2021, the Company and the Lender signed an Omnibus Amendment to the Credit Agreement. This Amendment extended the Commitment
Termination Date to April 1, 2024, amended other covenant requirements, partially removed indebtedness covenants and amended eligibility
rules. The interest rate charged on amounts borrowed is LIBOR plus
On
March 8, 2022, pursuant to Amendment No. 15 to Credit Agreement, the Commitment Amount was increased to be up to $
F-20
On
October 21, 2022, pursuant to Amendment No. 16 to Credit Agreement, the Commitment Amount was increased to be up to $
On June 7, 2023, pursuant to Amendment No. 17 to the Credit Agreement, the administrative agent and lender consented, on a one-time basis, to the formation of a new subsidiary, Flex TX, LLC, and to the Company’s execution and performance of the Revolution Agreements (as defined below) between the Company and BP Fundco, LLC to incur certain indebtedness and grant a security interest in certain of its assets in connection with (i) a Limited Payment Guaranty (Flex Revolution Loan) between the Company and BP Fundo, LLC and (ii) a Pledge Agreement among the Company, Flex Revolution, LLC and BP Fundco, LLC (collectively, the “Revolution Agreements”).
The
Credit Agreement provides that FlexShopper may not incur additional indebtedness (other than expressly permitted indebtedness) without
the permission of the Lender and also prohibits payments of cash dividends on common stock. Additionally, the Credit Agreement includes
covenants requiring FlexShopper to maintain a minimum amount of Equity Book Value, maintain a minimum amount of liquidity and cash and
maintain a certain ratio of Consolidated Total Debt to Equity Book Value (each capitalized term, as defined in the Credit Agreement).
Upon a Permitted Change of Control (as defined in the Credit Agreement), FlexShopper must refinance the debt under the Credit Agreement,
subject to the payment of an early termination fee.
| December 31, 2023 | ||||||||
| Required Covenant | Actual
Position | |||||||
| Equity Book Value not less than | $ | $ | ||||||
| Liquidity greater than | ||||||||
| Cash greater than | ||||||||
| Consolidated Total Debt to Equity Book Value ratio not to exceed | ||||||||
The Credit Agreement includes customary events of default, including, among others, failures to make payment of principal and interest, breaches or defaults under the terms of the Credit Agreement and related agreements entered into with the Lender, breaches of representations, warranties or certifications made by or on behalf of FlexShopper in the Credit Agreement and related documents (including certain financial and expense covenants), deficiencies in the borrowing base, certain judgments against FlexShopper and bankruptcy events.
The
Company borrowed under the Credit Agreement $
Interest
expense incurred under the Credit Agreement amounted to $
See Note 17 for subsequent events related to the loan payable under Credit Agreement.
F-21
8. CAPITAL STRUCTURE
The Company’s capital structure consists of preferred and common stock as described below:
Preferred Stock
The
Company is authorized to issue
| ● | Series 1 Convertible Preferred Stock – Series 1 Convertible Preferred Stock ranks senior to common stock upon liquidation. |
As
of December 31, 2023, each share of Series 1 Convertible Preferred Stock was convertible into
As
of December 31, 2023 and 2022, there were
| ● | Series 2 Convertible Preferred Stock – The Company sold to B2 FIE V LLC (the “Investor”), an entity affiliated with Pacific Investment Management Company LLC, |
The
Series 2 Preferred Shares were sold for $
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.
F-22
Common Stock
The
Company is authorized to issue
Warrants
In
connection with the issuance of Series 2 Convertible Preferred Stock in June 2016, the Company issued to the placement agent in such
offering warrants exercisable for
In
September 2018, the Company issued warrants exercisable for an aggregate
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
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 of
The
expense related to warrants was $
F-23
| Exercise | Common Stock Warrants | Weighted Average Remaining Contractual Life | ||||||||
| Price | Outstanding | Dec 31, 2023 | Dec 31, 2022 | |||||||
| $ | ||||||||||
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F-24
9. EQUITY COMPENSATION PLANS
In April 2018, the Company adopted the FlexShopper, Inc. 2018 Omnibus Equity Compensation Plan (the “2018 Plan”). The 2018 Plan replaced the Prior Plans. No new awards will be granted under the Prior Plans; however, awards outstanding under the Prior Plans upon approval of the 2018 Plan remain subject to and will be settled with shares under the applicable Prior Plan.
Grants
under the 2018 Plan and the Prior Plans consist of incentive stock options, non-qualified stock options, stock appreciation rights, restricted
shares, restricted stock units, dividend equivalents and other stock-based awards. Employees, directors and consultants and other service
providers are eligible to participate in the 2018 Plan and the Prior Plans. As of December 31, 2023, approximately
| Year
Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Stock options | $ | $ | ||||||
| Performance share units (“PSU”) | - | |||||||
| Total stock-based compensation | $ | $ | ||||||
The
fair value of stock-based compensation is recognized as compensation expense over the vesting period. Compensation expense recorded for
stock-based compensation in the consolidated statements of operations was $
Stock options:
| Year ended December 31, 2023 | Year ended December 31, 2022 | |||||||
| Exercise price | $ | $ | ||||||
| Expected life | ||||||||
| Expected volatility | % | % | ||||||
| Dividend yield | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
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.
F-25
| Number
of options | Weighted average exercise price | Weighted average contractual term (years) | Aggregate intrinsic value | |||||||||||||
| Outstanding at January 1, 2023 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Forfeited | ( | ) | ||||||||||||||
| Expired | ||||||||||||||||
| Outstanding at December 31, 2023 | $ | $ | ||||||||||||||
| Vested and exercisable at December 31, 2023 | $ | $ | ||||||||||||||
| Outstanding at January 1, 2022 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Forfeited | ( | ) | ||||||||||||||
| Expired | ( | ) | ||||||||||||||
| Outstanding at December 31, 2022 | $ | $ | ||||||||||||||
| Vested and exercisable at December 31, 2022 | $ | $ | ||||||||||||||
The
weighted average grant date fair value of options granted during the twelve month period ended December 31, 2023 and December 31, 2022
was $
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
The fair value of performance share units is based on the fair market value of the Company’s common stock on the date of grant. The compensation expense associated with these awards is amortized on an accelerated basis over the vesting period based on the Company’s projected assessment of the level of performance that will be achieved and earned. In the event the Company determines it is no longer probable that the minimum performance criteria specified in the plan will be achieved, all previously recognized compensation expense is reversed in the period such a determination is made. The 2022 PSU were forfeited in April 2023 as the minimum performance component was not achieved. For the 2023 PSU, the Company determined it was probable that the minimum performance component would be met and accordingly commenced amortization in the quarter ended June 30, 2023.
| Number
of performance share units | Weighted average grant date fair value | |||||||
| Non- vested at January 1, 2023 | $ | |||||||
| Granted | ||||||||
| Forfeited/ unearned | ( | ) | ||||||
| Vested | ||||||||
| Non- vested at December 31, 2023 | $ | |||||||
F-26
10. INCOME TAXES
| 2023 | 2022 | |||||||
| Federal tax at statutory rate | $ | ( | ) | $ | ( | ) | ||
| State tax, net of federal tax | ( | ) | ( | ) | ||||
| Tax impact on gain on bargain purchase | ( | ) | ||||||
| Permanent differences | ||||||||
| Change in statutory rate | ||||||||
| Change in valuation allowance | ( | ) | ||||||
| Other | ||||||||
| Benefit/ (expense) for income taxes | $ | ( | ) | $ | ( | ) | ||
| 2023 | 2022 | |||||||
| Deferred tax assets (liabilities): | ||||||||
| Equity based compensation | $ | $ | ||||||
| Allowance for doubtful accounts | ||||||||
| Fixed assets | ( | ) | ( | ) | ||||
| Lease impairment | ||||||||
| Lease Liability | ||||||||
| Right of use asset | ( | ) | ( | ) | ||||
| Accrued expenses | ( | ) | ||||||
| Change in fair value of loans receivable | ( | ) | ( | ) | ||||
| Tax credit carryforward | ||||||||
| Sec 163(j) carryforward | - | |||||||
| Federal loss carry-forwards | ||||||||
| State loss carry forward | ||||||||
| Intangible assets | ( | ) | ( | ) | ||||
| Other | ||||||||
| Gross deferred tax | ||||||||
| Valuation allowance | ||||||||
| Net deferred tax assets/ liability | $ | $ | ||||||
During the second quarter of 2022, the Company released the valuation allowance of the Company’s deferred tax asset recorded as of December 31, 2021. The Company had historical cumulative positive pre-tax income plus permanent differences. The realization of the deferred tax asset as of December 31, 2023 is more likely than not based on the Company’s projected taxable income.
The
release of the deferred tax asset valuation allowance resulted in a tax benefit of approximately $
As
of December 31, 2023, the Company had federal and state net operating loss carryforwards of $
F-27
| 2023 | 2022 | |||||||
| Current Income Tax: | ||||||||
| Federal | $ | $ | ||||||
| State | ( | ) | ||||||
| Deferred Income Tax: | ||||||||
| Federal | ( | ) | ( | ) | ||||
| State | ( | ) | ||||||
| $ | ( | ) | $ | ( | ) | |||
The Company’s effective tax rate for the year ended December 31, 2023 and 2022 differs from the statutory rate of 21% primarily due to state income taxes, permanent differences and the release of the valuation allowance.
The Company files tax returns in the U.S. federal jurisdiction and various states. At December 31, 2023, federal tax returns remained open for Internal Revenue Service review for tax years after 2018, while state tax returns remain open for review by state taxing authorities for tax years after 2019. The IRS can examine net operating loss carryforwards from earlier years the extent utilized in years after 2019. During 2019, the Company was notified that its 2017 federal income tax return was selected for examination. In the second quarter of 2021, the IRS completed their review with no changes to the reported tax. There were no other federal or state income tax audits being conducted as of December 31, 2023.
The Company completed its analysis and review of all tax positions taken through December 31, 2023 and does not believe that there are any unrecognized tax benefits or liabilities related to tax positions taken on its income tax returns.
11. CONTINGENCIES AND OTHER UNCERTAINTIES
Regulatory inquiries
In the first quarter of 2021, FlexShopper, along with a number of other lease-to-own companies, received a subpoena from the California Department of Financial Protection and Innovation (the “DFPI”) requesting the production of documents and information regarding the Company’s compliance with state consumer protection laws. The Company is cooperatively engaging with the DFPI in response to its inquiry. Although the Company believes it is in compliance with all applicable consumer protection laws and regulations in California, this inquiry ultimately could lead to an enforcement action and/or a consent order, and substantial costs, including legal fees, fines, penalties, and remediation expenses.
Litigation
The Company is not involved in any current or pending material litigation. The Company could be involved in litigation incidental to the operation of the business. The Company intends to vigorously defend all matters in which the Company is named defendants, and, for insurable losses, maintain significant levels of insurance to protect against adverse judgments, claims or assessments that may affect the Company. Although the adequacy of existing insurance coverage of the outcome of any legal proceedings cannot be predicted with certainty, based on the current information available, the Company does not believe the ultimate liability associated with known claims or litigation, if any, in which the Company is involved will materially affect the Company’s consolidated financial condition or results of operations.
F-28
Employment agreements
Certain
executive management entered into employment agreements with the Company. The contracts are for a period of
COVID-19 and other similar health crisis
The Company has been, and may in the future, be impacted by COVID-19 or any similar pandemic or health crisis, and this could affect our results of operations, financial condition, or cash flow in the future. The extent and the effects of the impact of any of these events on the operation and financial performance of our business depend on several factors which are highly uncertain and cannot be predicted.
12. COMMITMENTS
The Company does not have any commitments other than real property leases (Note 3).
F-29
13. 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 $
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. As of December 31, 2022, the Revolution Credit Agreement was not legally transferred to FlexShopper, so this liability was included in the condensed consolidated balance sheets on the line Purchase consideration payable related to acquisition as the Company was obligated for the outstanding balance as December 31, 2022. On June 7, 2023, the Revolution Credit Facility was legally transferred to FlexShopper (See Note 14)
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 $
As of 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 $
14. 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 13), 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 “Basepoint 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 $
F-30
The
Basepoint Credit Agreement includes covenants requiring the Basepoint Borrower and the guarantor to maintain a minimum amount of liquidity
that is no less than
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 Basepoint Borrower in the Basepoint Credit Agreement and related documents (including certain covenants), deficiencies in the Borrowing Base, certain judgments against the Basepoint Borrower and bankruptcy events.
Interest
expense incurred under the Basepoint Credit Agreement amounted to $
15. 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
16. SHARE REPURCHASE PROGRAM
On
May 17, 2023, the Board of Directors authorized a share repurchase program to acquire up to $
The
Company purchased under the share repurchase program
17. SUBSEQUENT EVENTS
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 $
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, maintain a minimum amount of liquidity and cash and maintain a certain ratio of Consolidated Total Debt to Equity Book Value (each capitalized term, as defined in the 2024 Credit Agreement). Upon a Permitted Change of Control (as defined in the 2024 Credit Agreement), FlexShopper must refinance the debt under the 2024 Credit Agreement, subject to the payment of an early termination fee.
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.
F-31
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a) The following documents are filed as part of this Form 10-K/A:
(1) Exhibits: The following is a list of exhibits filed as a part of this 10K-A:
| Exhibit Number | Description | |
| 31.1 | Rule 13a-14(a) Certification - Principal Executive Officer and Principal Financial Officer* | |
| 32.1 | Section 1350 Certification - Principal Executive Office and Principal Financial Officer* | |
| 101.INS | Inline XBRL Instance Document.* | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document.* | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.* | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.* | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document.* | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.* | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).* |
| * | Filed herewith. |
1
SIGNATURES
Pursuant to the requirements Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| FLEXSHOPPER, INC. | ||
| Dated: April 3, 2024 | By: | /s/ H. Russell Heiser, Jr. |
| H. Russell Heiser, Jr. | ||
| Chief Executive Officer | ||
2