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Summary of Significant Accounting Policies (Tables) | 9 Months Ended
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Sep. 30, 2023
Summary of Significant Accounting Policies [Abstract] |
Schedule of Reconciliation of Cash and Restricted Cash | The reconciliation of cash and restricted cash is as follows:
|  | September 30, 2023 |  |  | December 31, 2022 |
Cash |  | $ | 5,732,483 |  |  | $ | 6,051,713 |
Restricted cash |  |  | 5,326 |  |  |  | 121,636 |
Total cash and restricted cash |  | $ | 5,737,809 |  |  | $ | 6,173,349 |
Schedule of Lease Receivables Balances | The lease receivables balances consisted of the following as of September 30, 2023 and December 31, 2022:
|  | September 30, 2023 |  |  | December 31, 2022 |
Lease receivables |  | $ | 53,168,976 |  |  | $ | 48,618,843 |
Allowance for doubtful accounts |  |  | (11,747,936 | ) |  |  | (13,078,800 | )
Lease receivables, net |  | $ | 41,421,040 |  |  | $ | 35,540,043 |
Schedule of Lease Receivables Balances Charged Off Against the Allowance | Lease receivables balances charged off against the allowance were $726,007 and $33,454,814 for the three and nine months ended September 30, 2023, respectively, and $16,174,329 and $56,977,427 for the three and nine months ended September 30, 2022, respectively.
|  | Nine Months Ended September 30, 2023 |  |  | Year Ended December 31, 2022 |
Beginning balance |  | $ | 13,078,800 |  |  | $ | 27,703,278 |
Provision |  |  | 32,123,950 |  |  |  | 57,420,480 |
Accounts written off |  |  | (33,454,814 | ) |  |  | (72,044,958 | )
Ending balance |  | $ | 11,747,936 |  |  | $ | 13,078,800 |
Schedule of Net Lease Merchandise Balances | The net lease merchandise balances consisted of the following as of September 30, 2023 and December 31, 2022:
|  | September 30, 2023 |  |  | December 31, 2022 |
Lease merchandise at cost |  | $ | 47,501,405 |  |  | $ | 62,379,920 |
Accumulated depreciation and impairment reserve |  |  | (23,904,797 | ) |  |  | (30,829,479 | )
Lease merchandise, net |  | $ | 23,596,608 |  |  | $ | 31,550,441 |
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, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Lease billings and accruals |  | $ | 31,266,666 |  |  | $ | 38,580,116 |  |  | $ | 98,023,406 |  |  | $ | 117,774,390 |
Provision for doubtful accounts |  |  | (10,038,122 | ) |  |  | (15,075,109 | ) |  |  | (32,123,950 | ) |  |  | (42,639,102 | )
Gain/ (loss) on sale of lease receivables |  |  | (146,345 | ) |  |  | 1,007,079 |  |  |  | 2,803,745 |  |  |  | 7,611,586 |
Lease revenues and fees |  | $ | 21,082,199 |  |  | $ | 24,512,086 |  |  | $ | 68,703,201 |  |  | $ | 82,746,874 |
Schedule of Number of Common Shares Issuable Upon Conversion or Exercise | The following table reflects the number of common shares issuable upon conversion or exercise.
|  | September 30, |
|  | 2023 |  |  | 2022 |
Series 1 Convertible Preferred Stock |  |  | 225,231 |  |  |  | 225,231 |
Series 2 Convertible Preferred Stock |  |  | 5,845,695 |  |  |  | 5,845,695 |
Series 2 Convertible Preferred Stock issuable upon exercise of warrants |  |  | - |  |  |  | 116,903 |
Common Stock Options |  |  | 4,408,395 |  |  |  | 3,936,083 |
Common Stock Warrants |  |  | 2,255,184 |  |  |  | 2,255,184 |
Performance Share Units |  |  | 1,250,000 |  |  |  | 790,327 |
|  |  | 13,984,505 |  |  |  | 13,169,423 |
Schedule of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per common share for the nine months ended September 30, 2023 and 2022:
|  | Nine Months ended |
|  | September 30, |
|  | 2023 |  |  | 2022 |
Numerator |  |  |  |  |  |
Net (loss)/ income |  | $ | (4,587,769 | ) |  | $ | 5,727,852 |
Series 2 Convertible Preferred Stock dividends |  |  | (3,034,182 | ) |  |  | (1,829,332 | )
Net (loss)/ income attributable to common and Series 1 Convertible Preferred Stock |  |  | (7,621,951 | ) |  |  | 3,898,520 |
Net loss attributable to Series 1 Convertible Preferred Stock |  |  | - |  |  |  | (59,078 | )
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock |  |  | - |  |  |  | 18,868 |
Net (loss)/ income attributable to common shares- Numerator for basic and diluted EPS |  | $ | (7,621,951 | ) |  | $ | 3,858,310 |
Denominator |  |  |  |  |  |  |  |
Weighted average of common shares outstanding- Denominator for basic EPS |  |  | 21,740,027 |  |  |  | 21,611,879 |
Effect of dilutive securities: |  |  |  |  |  |  |  |
Series 1 Convertible Preferred Stock |  |  | - |  |  |  | 225,231 |
Common stock options and performance share units |  |  | - |  |  |  | 323,166 |
Common stock warrants |  |  | - |  |  |  | 243,171 |
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS |  |  | 21,740,027 |  |  |  | 22,403,447 |
Basic EPS |  | $ | (0.35 | ) |  | $ | 0.18 |
Diluted EPS |  | $ | (0.35 | ) |  | $ | 0.17 |
The following table sets forth the computation of basic and diluted earnings per common share for the three months ended September 30, 2023 and 2022:
|  | Three Months ended |
|  | September 30, |
|  | 2023 |  |  | 2022 |
Numerator |  |  |  |  |  |
Net income/ (loss) |  | $ | 940,101 |  |  | $ | (6,280,434 | )
Series 2 Convertible Preferred Stock dividends |  |  | (1,069,456 | ) |  |  | (609,778 | )
Net loss attributable to common shares- Numerator for basic and diluted EPS |  | $ | (129,355 | ) |  | $ | (6,890,212 | )
Denominator |  |  |  |  |  |  |  |
Weighted average of common shares outstanding- Denominator for basic and diluted EPS |  |  | 21,716,852 |  |  |  | 21,681,853 |
Basic EPS |  | $ | (0.01 | ) |  | $ | (0.32 | )
Diluted EPS |  | $ | (0.01 | ) |  | $ | (0.32 | )
Schedule of Fair Value Assets Measured on Recurring Basis | The Company’s financial instruments that are measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 is as follows:
|  | Fair Value Measurement Using |  |  | Carrying |
Financial instruments – As of September 30, 2023 (1) |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Amount |
Loan receivables at fair value |  | $ | - |  |  | $ | - |  |  | $ | 31,679,882 |  |  | $ | 46,113,207 |
Promissory note related to acquisition |  |  | - |  |  |  | - |  |  |  | 3,191,272 |  |  |  | 3,191,272 |
|  | 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 |  | $ | - |  |  | $ | - |  |  | $ | 32,932,504 |  |  | $ | 42,747,668 |
Promissory note related to acquisition |  |  | - |  |  |  | - |  |  |  | 3,158,471 |  |  |  | 3,158,471 |
(1) | For cash, lease receivable, and accounts payable the carrying amount is a reasonable estimate of fair value due to their short-term nature. The carrying value of loans payable under the Credit Agreement, the carrying value of loans payable under Basepoint Credit Agreement, and the carrying value of promissory notes to related parties approximates fair value based upon their interest rates, which approximate current market interest rates.
Schedule of Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation | the following table presents a reconciliation of the beginning and ending balances for the years ended September 30, 2023 and December 31, 2022:
|  | Nine Months Ended September 30, 2023 |  |  | Year Ended December 31, 2022 |
Beginning balance |  | $ | 32,932,504 |  |  | $ | 3,560,108 |
Purchases of loan participation |  |  | 389,949 |  |  |  | 31,216,406 |
Obligation of loan participation |  |  | (12,931 | ) |  |  | 12,931 |
Purchase of loan portfolio in Revolution Transaction |  |  | - |  |  |  | 13,320,326 |
Loan originations |  |  | 42,789,600 |  |  |  | 5,519,303 |
Interest and fees(1) |  |  | 11,731,851 |  |  |  | 16,680,080 |
Collections |  |  | (62,409,370 | ) |  |  | (27,816,669 | )
Net charge off (1) |  |  | (10,387,396 | ) |  |  | (10,653,751 | )
Net change in fair value(1) |  |  | 16,645,675 |  |  |  | 1,093,770 |
Ending balance |  | $ | 31,679,882 |  |  | $ | 32,932,504 |
(1) | Included in loan revenues and fees, net of changes in fair value in the consolidated statements of operations.
Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement | the following table presents quantitative information about the inputs used in the fair value measurement as of September 30, 2023 and December 31, 2022:
|  | September 30, 2023 |  |  | December 31, 2022 |
|  | Minimum |  |  | Maximum |  |  | Weighted Average(2) |  |  | Minimum |  |  | Maximum |  |  | Weighted Average |
Estimated losses(1) |  |  | 0.1 | % |  |  | 92.5 | % |  |  | 36.8 | % |  |  | 2.0 | % |  |  | 92.4 | % |  |  | 40.8 | %
Servicing costs |  |  | - |  |  |  | - |  |  |  | 4.6 | % |  |  | - |  |  |  | - |  |  |  | 4.5 | %
Discount rate |  |  | - |  |  |  | - |  |  |  | 20.1 | % |  |  | - |  |  |  | - |  |  |  | 21.0 | %
(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, 2023 and December 31, 2022 concerning loan receivables at fair value are as follows:
|  | September 30, 2023 |  |  | December 31, 2022 |
Aggregate fair value of loan receivables that are 90 days or more past due |  | $ | 23,571,023 |  |  | $ | 7,147,585 |
Unpaid principal balance of loan receivables that are 90 days or more past due |  |  | 39,128,315 |  |  |  | 19,834,547 |
Aggregate fair value of loan receivables in non-accrual status |  |  | 23,434,514 |  |  |  | 6,947,224 |

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