10-K/A: FlexShopper Amends 2023 Annual Report Due to Share Calculation Error

FlexShopper, Inc. has filed an amendment to its 2023 annual report to correct inaccuracies in the calculation of weighted average common shares and loss per share.

Summary

• FlexShopper, Inc. filed an amendment to its original 2023 annual report on Form 10-K to correct errors in the calculation of basic and diluted weighted average common shares and the basic and diluted loss per common share.
• The original filing, submitted on April 1, 2024, contained inaccurate figures in the Consolidated Statements of Operations and Note 2 of the Consolidated Financial Statements.
• This amendment includes new certifications from the principal executive officer and principal financial officer as required by the Securities Exchange Act of 1934.
• No other changes were made to the original filing, and the original filing continues to speak as of its original date.
• The company's common stock is traded on the NASDAQ under the symbol FPAY.
• As of April 3, 2024, there were 21,752,304 shares of common stock outstanding.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the need for an amendment to correct financial reporting errors, which raises concerns about internal controls and accuracy. The error is a basic accounting function and should not have occurred.

Positives

• The company is taking corrective action to address errors in its financial reporting.
• The company is transparent about the nature of the error and the steps taken to correct it.
• The company has filed the required certifications from its principal executive and financial officers.

Negatives

• The need for an amendment indicates a weakness in the company's internal controls over financial reporting.
• The original filing contained inaccurate information, which could have misled investors.

Risks

• The company's internal controls may be subject to further scrutiny due to the need for this amendment.
• The company may face reputational damage due to the error in its financial reporting.
• There is a risk that similar errors could occur in the future if internal controls are not improved.

Future Outlook

The company has not updated the disclosures to reflect any events which occurred after the original filing date, and this amendment should be read in conjunction with subsequent SEC filings.

Management Comments

• The company is filing this amendment to correct the basic and diluted weighted average common shares and the basic and diluted loss per common shares as of December 31, 2023.
• 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.

Industry Context

This amendment is specific to FlexShopper and does not directly reflect broader industry trends, but it highlights the importance of accurate financial reporting for all public companies.

Comparison to Industry Standards

• The need for a restatement due to calculation errors is not in line with industry best practices for financial reporting.
• Companies like Aaron's and Rent-A-Center, which operate in similar lease-to-own sectors, typically maintain robust internal controls to avoid such errors.
• The error in share calculation is a basic accounting function, and its miscalculation is a deviation from expected standards for public companies.

Stakeholder Impact

• Shareholders may be concerned about the accuracy of the company's financial reporting.
• The company's reputation may be negatively impacted by the need for this amendment.
• Creditors may scrutinize the company's financial statements more closely.

Next Steps

• The company should review and strengthen its internal controls over financial reporting to prevent similar errors in the future.
• Investors should monitor the company's subsequent filings for any further issues or corrections.

Key Dates

Keywords

FlexShopper, amendment, 10-K/A, financial reporting, weighted average shares, loss per share, internal controls, financial statements, SEC filing