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Warrants

12 Months Ended

Dec. 31, 2019

9. WARRANTS:

In September 2018, the Company issued warrants exercisable for 5,750,000 shares of common stock at an exercise price of $1.25 per share. The warrants were immediately exercisable and expire five years from the date of issuance. The warrants were listed on the Nasdaq Capital Market under the symbol "FPAYW." During the year ended December 31, 2019, 35,100 warrants were exercised resulting in gross proceeds of $43,875. On February 4, 2020, we completed the Warrant Exchange Offer. As a result of these transactions, there were no public warrants outstanding as of February 19, 2020.

The Company also issued additional warrants exercisable for an aggregate 1,055,184 shares of common stock at an exercise price of $1.25 per warrant to Mr. Heiser and NRNS in connection with partial conversions of their promissory notes (see Note 6). The warrants are exercisable at $1.25 per share of common stock and expire on September 28, 2023.

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

As part of a consulting agreement with XLR8 Capital Partners LLC (the "Consultant"), an entity of which the Company's Chairman is manager, the Company agreed to issue 40,000 warrants to the Consultant monthly for 12 months beginning on March 1, 2019 at an exercise price of $1.25 per share or, if the closing share price on the last day of the month exceeds $1.25, then such exercise price will be 110% of the closing share price. The warrants are immediately exercisable and expire following the close of business on June 30, 2023. As of December 31, 2019, the Company recorded an expense of $127,561 based on a weighted average valuation of $0.32 per warrant as determined by the fair market value of the Company's warrants that are actively traded and listed on the Nasdaq Capital Market under the symbol "FPAYW".

Grant	Warrants		Expense		Valuation
Date	Granted		Recorded		Per Warrant
March 31, 2019		40,000	$	11,200	$	0.28
April 30, 2019		40,000	$	10,000	$	0.25
May 31, 2019		40,000	$	10,000	$	0.25
June 30, 2019		40,000	$	12,000	$	0.30
July 31, 2019		40,000	$	14,904	$	0.37
August 31, 2019		40,000	$	14,883	$	0.37
September 30, 2019		40,000	$	11,831	$	0.30
October 31, 2019		40,000	$	10,630	$	0.27
November 30, 2019		40,000	$	13,612	$	0.34
December 31, 2019		40,000	$	18,501	$	0.46
		400,000	$	127,561	$	0.32

The following table summarizes information about outstanding stock warrants as of December 31, 2019, all of which are exercisable:

		Common		Series 2 Preferred		Weighted Average
Exercise		Stock Warrants		Stock Warrants		Remaining
Price		Outstanding		Outstanding		Contractual Life
$	5.50		177,304			2 years
$	1.25		6,930,084			3.5 years
$	1.76		40,000			3.5 years
$	2.00		40,000			3.5 years
$	1.69		40,000			3.5 years
$	1.54		40,000			3.5 years
$	2.01		40,000			3.5 years
$	2.78		40,000			3.5 years
$	1,250		-		439	3.5 years
			7,347,388		439