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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended
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Sep. 30, 2024
Accounting Policies [Abstract] |
Schedule of Lease Receivables Balances | The lease receivables balances consisted of the following as of September 30, 2024 and December 31, 2023:
| September 30, 2024 |  | December 31, 2023
Lease receivables | $ | 104,879,703 |  |  | $ | 64,749,918 |
Allowance for doubtful accounts | (38,698,232) |  |  | (19,954,828) |
Lease receivables, net | $ | 66,181,471 |  |  | $ | 44,795,090 |
Schedule of Lease Receivables Balances Charged Off Against the Allowance |
| Nine Months Ended September 30, 2024 |  | Year Ended December 31, 2023
Beginning balance | $ | 19,954,828 |  |  | $ | 13,078,800 |
Provision | 25,373,485 |  |  | 42,505,647 |
Accounts written off | (6,630,081) |  |  | (35,629,619) |
Ending balance | $ | 38,698,232 |  |  | $ | 19,954,828 |
Schedule of Net Lease Merchandise Balances | The net lease merchandise balances consisted of the following as of September 30, 2024 and December 31, 2023:
| September 30, 2024 |  | December 31, 2023
Lease merchandise at cost | $ | 48,382,621 |  |  | $ | 49,687,498 |
Accumulated depreciation and impairment reserve | (24,295,611) |  |  | (20,556,058) |
Lease merchandise, net | $ | 24,087,010 |  |  | $ | 29,131,440 |
Schedule of Lessor Revenues and Fees | The breakout of lease revenues and fees, net of lessor bad debt expense, that ties to the consolidated statements of operations is shown below:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Lease billings and accruals | $ | 36,381,080 |  |  | $ | 31,266,666 |  |  | $ | 106,352,849 |  |  | $ | 98,023,406 |
Provision for doubtful accounts | (8,083,009) |  |  | (10,038,122) |  |  | (25,373,485) |  |  | (32,123,950) |
Gain on sale of lease receivables | 15,791 |  |  | (146,345) |  |  | 77,225 |  |  | 2,803,745 |
Lease placement collections | 50,328 |  |  | - |  |  | 215,384 |  |  | - |
Lease revenues and fees | $ | 28,364,190 |  |  | $ | 21,082,199 |  |  | $ | 81,271,973 |  |  | $ | 68,703,201 |
Schedule of Conversions of Stock | The following table reflects the number of common shares issuable upon conversion or exercise.
| September 30,
| 2024 |  | 2023
Series 1 Convertible Preferred Stock | 225,231 |  | 225,231
Series 2 Convertible Preferred Stock | 5,845,695 |  | 5,845,695
Common Stock Options | 5,073,447 |  | 5,435,572
Common Stock Warrants | 2,255,184 |  | 2,255,184
Performance Share Units | 937,499 |  | 1,250,000
| 14,337,056 |  | 15,011,682
Schedule of Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share for the nine months ended September 30, 2024 and 2023:
| Nine Months Ended September 30,
| 2024 |  | 2023
Numerator |  |  |
Net income/ (loss) | $ | 549,147 |  |  | $ | (4,587,769) |
Series 2 Convertible Preferred Stock dividends | (3,337,600) |  |  | (3,034,182) |
Net loss attributable to common and Series 1 Convertible Preferred Stock | (2,788,453) |  |  | (7,621,951) |
Net income attributable to Series 1 Convertible Preferred Stock | - |  |  | - |
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock | - |  |  | - |
Net loss attributable to common shares- Numerator for basic EPS | (2,788,453) |  |  | (7,621,951) |
Effect of dilutive securities: |  |  |
Series 2 Convertible Preferred Stock dividends | - |  |  | - |
Net loss attributable to common shares after assumed conversions- Numerator for diluted EPS | $ | (2,788,453) |  |  | $ | (7,621,951) |
Denominator |  |  |
Weighted average of common shares outstanding- Denominator for basic EPS | 21,547,702 |  |  | 21,740,027 |
Effect of dilutive securities: |  |  |
Series 2 Convertible Preferred Stock | - |  |  | - |
Series 1 Convertible Preferred Stock | - |  |  | - |
Common stock options and performance share units | - |  |  | - |
Common stock warrants | - |  |  | - |
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator diluted EPS | 21,547,702 |  |  | 21,740,027 |
Basic EPS | $ | (0.13) |  |  | $ | (0.35) |
Diluted EPS | $ | (0.13) |  |  | $ | (0.35) |
The following table sets forth the computation of basic and diluted earnings per common share for the three months ended September 30, 2024 and 2023:
| Three Months Ended September 30,
| 2024 |  | 2023
Numerator |  |  |
Net income | $ | 2,366,384 |  |  | $ | 940,101 |
Series 2 Convertible Preferred Stock dividends | (1,176,402) |  |  | (1,069,456) |
Net income/ (loss) attributable to common and Series 1 Convertible Preferred Stock | 1,189,982 |  |  | (129,355) |
Net income attributable to Series 1 Convertible Preferred Stock | (24,435) |  |  | - |
Series 2 Convertible Preferred Stock dividends attributable to Series 1 Convertible Preferred Stock | 12,147 |  |  | - |
Net income/ (loss) attributable to common shares- Numerator for basic EPS | 1,177,694 |  |  | (129,355) |
Effect of dilutive securities: |  |  |
Series 2 Convertible Preferred Stock dividends | - |  |  | - |
Net income/ (loss) attributable to common shares after assumed conversions – Numerator for diluted EPS | $ | 1,177,694 |  |  | $ | (129,355) |
Denominator |  |  |
Weighted average of common shares outstanding- Denominator for basic EPS | 21,586,935 |  |  | 21,716,852 |
Effect of dilutive securities |  |  |
Series 2 Convertible Preferred Stock | - |  |  | - |
Series 1 Convertible Preferred Stock | 225,231 |  |  | - |
Common stock options and performance share units | 419,622 |  |  | - |
Common stock warrants | - |  |  | - |
Adjusted weighted average of common shares outstanding and assumed conversions- Denominator for diluted EPS | 22,231,788 |  |  | 21,716,852 |
Basic EPS | $ | 0.05 |  |  | $ | (0.01) |
Diluted EPS | $ | 0.05 |  |  | $ | (0.01) |
Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis | The Company’s financial instruments that are measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 is as follows:
|  | Fair Value Measurement Using |  | Carrying Amount | Unpaid Principal Balance
Financial instruments – As of September 30, 2024 (1) |  | Level 1 |  | Level 2 |  | Level 3 |
Loan receivables at fair value |  | $ | - |  |  | $ | - |  |  | $ | 47,116,140 |  |  | $ | 47,116,140 |  | $ | 85,301,661 |
|  | Fair Value Measurement Using |  | Carrying Amount | Unpaid Principal Balance
Financial instruments – As of December 31, 2023 (1) |  | Level 1 |  | Level 2 |  | Level 3 |
Loan receivables at fair value |  | $ | - |  |  | $ | - |  |  | $ | 35,794,290 |  |  | $ | 35,794,290 |  | $ | 48,076,705 |
(1)For cash, lease receivable, and accounts payable the carrying amount is a reasonable estimate of fair value due to their short-term nature. The carrying value of loans payable under the Credit Agreement, the carrying value of loans payable under the Basepoint Credit Agreement, and the carrying value of promissory notes to related parties approximates fair value based upon their interest rates, which approximate current market interest rates.
Schedule of Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation | For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents a reconciliation of the beginning and ending balances for the nine months ended September 30, 2024 and the year ended December 31, 2023:
| Nine Months Ended September 30, 2024 |  | Year Ended December 31, 2023
Beginning balance | $ | 35,794,290 |  |  | $ | 32,932,504 |
Purchases of loan participation | 1,058,998 |  |  | 389,949 |
Obligation of loan participation | - |  |  | (12,931) |
Loan originations | 39,193,233 |  |  | 57,554,746 |
Interest and fees(1) | 8,527,443 |  |  | 14,801,188 |
Collections | (47,564,200) |  |  | (80,089,020) |
Net charge off (1) | (2,833,156) |  |  | (11,041,155) |
Net change in fair value(1) | 12,939,532 |  |  | 21,259,009 |
Ending balance | $ | 47,116,140 |  |  | $ | 35,794,290 |
(1)Included in loan revenues and fees, net of changes in fair value in the condensed consolidated statements of operations
Schedule of Quantitative Information About the Inputs Used in Fair Value Measurement | For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents quantitative information about the inputs used in the fair value measurement as of September 30, 2024 and December 31, 2023:
| September 30, 2024 |  | December 31, 2023
| Minimum |  | Maximum |  | Weighted Average(2) |  | Minimum |  | Maximum |  | Weighted Average
Estimated losses(1) | 0 | % |  | 93.9 | % |  | 60.6 | % |  | 0 | % |  | 92.5 | % |  | 28.9 | %
Servicing costs | - |  |  | - |  |  | 4.1 | % |  | - |  |  | - |  |  | 4.7 | %
Discount rate | - |  |  | - |  |  | 20.3 | % |  | - |  |  | - |  |  | 20.1 | %
(1)Figure disclosed as a percentage of outstanding principal balance. (2)Unobservable inputs were weighted by outstanding principal balance, which are grouped by origination channel.
Schedule of Concerning Loan Receivables at Fair Value | Other relevant data as of September 30, 2024 and December 31, 2023 concerning loan receivables at fair value are as follows:
| September 30, 2024 |  | December 31, 2023
Aggregate fair value of loan receivables that are 90 days or more past due | $ | 39,728,088 |  |  | $ | 27,828,083 |
Unpaid principal balance of loan receivables that are 90 days or more past due | $ | 77,354,984 |  |  | $ | 29,304,704 |
Aggregate fair value of loan receivables in non-accrual status | $ | 39,906,943 |  |  | $ | 27,764,926 |

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