Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 000-56243

STANDARD PREMIUM FINANCE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Florida		81-2624094
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

13590 SW 134th Avenue, Suite 214, Miami, FL 33186

(Address of principal executive offices and Zip Code)

305-232-2752

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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	☐
Non-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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 2,905,016 shares of common stock issued and outstanding as of May 13, 2024.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties. These statements may relate to, but are not limited to, information or assumptions about us, our capital and other expenditures, dividends, financing plans, capital structure, cash flow, our potential future business acquisitions, future economic performance, operating income and management’s plans, strategies, goals and objectives for future operations and growth. These forward-looking statements generally are accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,” “expect,” “should,” “seek,” “project,” “plan,” “would,” “could,” “can,” “may,” and similar terms. Any statement that is not a historical fact is a forward-looking statement. It should be understood that these forward-looking statements are necessarily estimates reflecting the best judgment of senior management, not guarantees of future performance. They are subject to a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described in Part I. “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 15, 2024. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Forward-looking statements represent intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements.

Each of the terms the “Company” and “Standard Premium” as used herein refers collectively to Standard Premium Finance Holdings, Inc. and its wholly owned subsidiaries, unless otherwise stated.

STANDARD PREMIUM FINANCE HOLDINGS, INC.

TABLE OF CONTENTS

Part I – FINANCIAL INFORMATION
Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
SIGNATURES	29

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

STANDARD PREMIUM FINANCE HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
MARCH 31, 2024


CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023	3
Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 (unaudited)	4
Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2024 and 2023 (unaudited)	5
Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited)	6
Condensed Notes to Consolidated Financial Statements (unaudited)	7- 20

Standard Premium Finance Holdings, Inc. and Subsidiary

Consolidated Balance Sheets

March 31, 2024 (unaudited) and December 31, 2023


	March 31,		December 31,
	2024		2023
	(unaudited)
ASSETS
CURRENT ASSETS
Cash	$	1,144	$	45,239
Premium finance contracts and related receivable, net of allowance for credit losses of $1,599,435 and $1,501,593 at March 31, 2024 and December 31, 2023, respectively		65,229,278		60,739,699
Prepaid expenses and other current assets		722,501		307,206
TOTAL CURRENT ASSETS		65,952,923		61,092,144

Property and equipment, net		141,201		122,500
Operating lease assets		286,196		80,840
Finance lease assets		35,350		38,664

OTHER ASSETS
Cash surrender value of life insurance		658,414		650,237
Deferred tax asset		412,000		391,000
TOTAL OTHER ASSETS		1,070,414		1,041,237

TOTAL ASSETS	$	67,486,084	$	62,375,385

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Cash overdraft	$	175,448	$	168,543
Line of credit, net		44,737,234		42,374,715
Drafts payable		4,015,933		2,681,359
Note payable - current portion		2,939,400		2,181,400
Note payable - stockholders and related parties - current portion		355,000		310,000
Payroll Protection Program loan - current portion		108,435		92,785
Operating lease obligation - current portion		117,997		50,594
Finance lease obligation - current portion		13,340		13,166
Accrued expenses and other current liabilities		1,795,811		1,555,044
TOTAL CURRENT LIABILITIES		54,258,598		49,427,606

LONG-TERM LIABILITIES
Note payable, net of current portion		4,402,855		4,684,157
Note payable - stockholders and related parties, net of current portion		2,131,000		1,778,000
Payroll Protection Program loan, net of current portion		7,794		31,139
Operating lease obligation, net of current portion		168,199		30,246
Finance lease obligation, net of current portion		23,992		27,393
TOTAL LONG-TERM LIABILITIES		6,733,840		6,550,935

TOTAL LIABILITIES		60,992,438		55,978,541

COMMITMENTS AND CONTINGENCIES (see Note 13)		—		—

STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.001 per share; 20 million shares authorized, 600,000 shares designated as Series A - convertible, 166,000 issued and outstanding at March 31, 2024 and December 31, 2023		166		166
Common stock, par value $0.001 per share; 100 million shares authorized, 2,905,016 shares issued and outstanding at March 31, 2024 and December 31, 2023		2,905		2,905
Additional paid in capital		3,418,901		3,411,851
Retained earnings		3,071,674		2,981,922
TOTAL STOCKHOLDERS' EQUITY		6,493,646		6,396,844

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	67,486,084	$	62,375,385

See accompanying condensed notes to the consolidated unaudited financial statements.

Standard Premium Finance Holdings, Inc. and Subsidiary

Consolidated Statements of Operations

For the Three Months Ended March 31, 2024 and 2023

(unaudited)


	For the Three Months Ended
	March 31,
	2024			2023

REVENUES
Finance charges	$	2,451,201		$	1,737,944
Late charges		277,370			247,229
Origination fees		101,382			93,631

TOTAL REVENUES		2,829,953			2,078,804

OPERATING COSTS AND EXPENSES

Interest		1,083,160			791,647
Salaries and wages		529,648			429,250
Commissions		386,543			242,435
Provision for credit losses		225,113			191,853
Professional fees		102,233			87,820
Postage		30,057			27,878
Insurance		47,759			27,474
Other operating expenses		260,846			200,699

TOTAL COSTS AND EXPENSES		2,665,359			1,999,056

INCOME BEFORE INCOME TAXES		164,594			79,748

PROVISION FOR INCOME TAXES		45,792			10,868

NET INCOME		118,802			68,880

PREFERRED SHARE DIVIDENDS		(29,050	)		(29,050	)

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	89,752		$	39,830

Net income per share attributable to common stockholders
Basic		0.03			0.01
Diluted		0.03			0.01

Weighted average common shares outstanding
Basic		2,905,016			2,905,016
Diluted		3,051,788			3,357,414

See accompanying condensed notes to the consolidated unaudited financial statements.

Standard Premium Finance Holdings, Inc. and Subsidiary

Consolidated Statements of Changes in Stockholders’ Equity

For the Three Months Ended March 31, 2024 and 2023

(unaudited)


	Series A Preferred Stock				Common Stock				Additional Paid-in		Retained			Total Stockholders'
	Shares		Amount		Shares		Amount		Capital		Earnings			Equity

BALANCE AT DECEMBER 31, 2022		166,000	$	166		2,905,016	$	2,905	$	3,383,651	$	2,565,720		$5,952,442

Options issued for services		—		—		—		—		7,050		—		7,050
Dividends paid on preferred stock		—		—		—		—		—		(29,050	)	(29,050)
Net income		—		—		—		—		—		68,880		68,880
BALANCE AT MARCH 31, 2023 (unaudited)		166,000	$	166		2,905,016	$	2,905	$	3,390,701	$	2,605,550		$5,999,322


	Series A Preferred Stock			Common Stock				Additional Paid-in		Retained		Total Stockholders'
	Shares		Amount	Shares		Amount		Capital		Earnings		Equity

BALANCE AT DECEMBER 31, 2023	166,000	$	166	2,905,016	$	2,905	$	3,411,851	$	2,981,922		$6,396,844

Options issued for services	—		—	—		—		7,050		—		7,050
Dividends paid on preferred stock	—		—	—		—		—		(29,050	)	(29,050)
Net income	—		—	—		—		—		118,802		118,802
BALANCE AT MARCH 31, 2024 (unaudited)	166,000	$	166	2,905,016	$	2,905	$	3,418,901	$	3,071,674		$6,493,646

See accompanying condensed notes to the consolidated unaudited financial statements.

Standard Premium Finance Holdings, Inc. and Subsidiary

Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2024 and 2023

(unaudited)


	For the Three Months Ended
	March 31,
	2024			2023
CASH FLOW FROM OPERATING ACTIVITIES:
NET INCOME	$	118,802		$	68,880
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation		7,967			6,257
Amortization of right to use asset - operating lease		29,979			28,285
Amortization of finance lease asset		3,314			3,314
Provision for credit losses		225,113			191,853
Amortization of loan origination fees		394			28,519
Options issued for services		7,050			7,050
Changes in operating assets and liabilities:
Decrease in prepaid expenses and other current assets		(415,295	)		(1,008	)
(Increase)/Decrease in deferred tax asset, net		(21,000	)		(15,836	)
Increase/(Decrease) in drafts payable		1,334,574			509,384
Increase/(Decrease) in accrued expenses and other current liabilities		240,767			136,446
Decrease in operating lease liability		(29,979	)		(28,285	)
Net cash provided by operating activities		1,501,686			934,859

CASH FLOWS FROM INVESTING ACTIVITIES:
Disbursements under premium finance contracts receivable, net		(4,714,692	)		(2,734,693	)
Payments made on cash surrender value of life insurance		(8,177	)		(7,651	)
Purchases of property and equipment		(26,668	)		—
Net cash used in investing activities		(4,749,537	)		(2,742,344	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft		6,905			—
Proceeds of line of credit, net of repayments		2,362,125			1,915,761
Proceeds from notes payable		518,698			25,000
Repayment of notes payable		(42,000	)		(242,000	)
Proceeds from notes payable - stockholders and related parties		398,000			30,000
Repayment of notes payable - stockholders and related parties		—			(27,000	)
Repayment of finance lease obligation		(3,227	)		(3,062	)
Repayment of PPP loan		(7,695	)		(22,883	)
Dividends paid on Series A Convertible Preferred Stock		(29,050	)		(29,050	)
Net cash provided by financing activities		3,203,756			1,646,766

NET CHANGE IN CASH		(44,095	)		(160,719	)

CASH AT THE BEGINNING OF THE PERIOD		45,239			421,211

CASH AT THE END OF THE PERIOD	$	1,144		$	260,492

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Income taxes	$	—		$	—
Interest paid	$	1,065,259		$	779,684
NON-CASH INVESTING AND FINANCING TRANSACTION:
Operating lease assets obtained in exchange for lease liabilities	$	235,335		$	—

See accompanying condensed notes to the consolidated unaudited financial statements.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

1. Principles of Consolidation and Description of Business

Standard Premium Finance Holdings, Inc. (“SPFH” or the “Holding”) was incorporated on May 12, 2016, pursuant to the laws of the State of Florida.

Standard Premium Finance Management Corporation (“SPFMC” or the “subsidiary”) was incorporated on April 23, 1991, pursuant to the laws of the State of Florida, to engage principally in the insurance premium financing business. The Subsidiary is a licensed insurance premium finance company in thirty-three states.

The accompanying consolidated financial statements include the accounts of SPFH and its wholly-owned subsidiary SPFMC. SPFH and its subsidiary are collectively referred to as (“the Company”). All intercompany balances and transactions have been eliminated in consolidation.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements (unaudited), which include the accounts of Standard Premium Finance Holdings, Inc. and its wholly-owned subsidiary, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes thereto for the year ended December 31, 2023.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements of Standard Premium Finance Holdings, Inc. and its wholly-owned subsidiary for the fiscal year ended December 31, 2023, have been omitted.

Cash and Cash Equivalents and Cash Overdraft

The Company considers short-term interest-bearing investments with initial maturities of three months or less to be cash equivalents. There are no cash equivalents at March 31, 2024 and December 31, 2023.

The Company experienced a cash overdraft of $175,448 and $168,543 in its group of bank accounts at its primary lender as of March 31, 2024 and December 31, 2023, respectively. As this group of bank accounts is funded by the Company’s line of credit (see Note 7), overdrafts are an expected part of the cash cycle. The Company is not charged any fees for overdrafts as the line of credit funds the operating accounts daily. The Company actively manages its cash balances to minimize unnecessary interest charges.

Revenue Recognition

Finance charges on insurance premium installment contracts are initially recorded as unearned interest and are credited to income monthly over the term of the finance agreement. An initial service fee, where permissible, and the first month’s interest, on a pro rata basis, are recognized as income at the inception of a contract. The initial service fee can only be charged once to an insured in a twelve-month period. In accordance with industry practice, finance charges are recognized as income using the “Rule of 78s” method of amortizing finance charge income, which does not materially differ from the interest method of amortizing finance charge income on short term receivables. Late charges are recognized as income when charged. Unearned interest is netted against Premium Finance Contracts and Related Receivables on the balance sheets for reporting purposes.

The provisions of Financial Accounting Standards Board (“FASB”) ASC 606, Revenue from Contracts with Customers (“ASC 606”) provide guidance on the recognition, presentation, and disclosure of revenue in financial statements. ASC 606 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. ASC 606 requires revenue to be recognized upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for services that are distinct and accounted for as separate performance obligations. In such cases, revenue would be recognized at the time of delivery or over time for each performance of service. However, ASC 606 exempts items under ASC 835-30 and ASC 310-20 (i.e. finance charges, late charges and origination fee income for the Company).

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

2. Summary of Significant Accounting Policies (Continued)

Premium Finance Contracts and Related Receivable

The Company finances insurance premiums on policies primarily for commercial enterprises. The Company amortizes these loans over the term of each contract, which varies from three to twelve monthly payments, and manages these loans on a collective basis based on similar risk characteristics. As of March 31, 2024 and December 31, 2023, the portfolio has an amortized cost basis of $68,421,630 and $63,602,075, respectively. Repayment terms are structured such that the contracts will be repaid within the term of the underlying insurance policy, generally less than one year. The contracts are secured by the unearned premium of the insurance carrier which is obligated to pay the Company any unearned premium in the event the insurance policy is cancelled pursuant to a power of attorney contained in the finance contract. As of March 31, 2024, and December 31, 2023, the amount of unearned premium on open and cancelled contracts totaled $93,843,332 and $87,618,261, respectively. The annual percentage interest rates on new contracts averaged approximately 17.2% and 16.5% during the three months ended March 31, 2024 and 2023, respectively.

Allowance for Credit Losses

The carrying amount of the Premium Finance Contracts (“Contracts”) is reduced by an allowance for credit losses that are maintained at a level which, in management’s judgment, is adequate to absorb credit losses inherent in the Contracts. The amount of the allowance is based upon management’s evaluation of the collectability of the Contracts, including the nature of the accounts, credit concentration, trends, historical data, specific impaired Contracts, current and forecasted economic conditions, and other risks inherent in the Contracts. The allowance is increased by a provision for credit losses, which is charged to expense, and reduced by charge-offs, net of recovery.

To estimate expected credit losses on loans that exhibit similar risk characteristics, the Company considers historical loss information (updated for current conditions and reasonable and supportable forecasts that affect the expected collectability of the amortized cost basis pool) using a loss-rate approach. The Company monitors the A.M. Best rating for insurance carriers whose policies are being financed as a factor of the quality of its contract receivables. As of March 31, 2024, and December 31, 2023, the Company did not expect any material degradation to the ratings of the insurance carriers it currently underwrites or anticipates underwriting in a way that would affect the allowance for credit losses.

Amortization of Line of Credit Costs

Amortization of line of credit costs is computed using the straight-line method over the life of the loan.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions used in valuation of deferred tax assets, allowance for credit losses, depreciable lives of property and equipment, and valuation of stock-based compensation.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

2. Summary of Significant Accounting Policies (Continued)

Concentration of Credit and Financial Instrument Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and loans receivable from customers, agents, and insurance companies. The Company maintains its cash balances at two banks. Accounts at these financial institutions are insured by the Federal Deposit Insurance Corporation up to $250,000. Uninsured balances are $94,839 and $250,200 at March 31, 2024 and December 31, 2023, respectively. The Company mitigates this risk by maintaining its cash balances at high-quality financial institutions. The following table provides a reconciliation between uninsured balances and cash per the consolidated balance sheet:


	March 31, 2024 (unaudited)			December 31, 2023
Uninsured balance	$	94,839		$	250,200
Plus: Insured balances		250,000			250,000
Plus: Balances at institutions that do not exceed FDIC limit		1,144			45,239
Plus: Cash overdraft		175,448			168,543
Less: Outstanding checks		(520,287	)		(668,743	)

Cash per Consolidated Balance Sheet	$	1,144		$	45,239

The Company controls its credit risk in accounts receivable through credit standards, limits on exposure, by monitoring the financial condition of insurance companies, by adhering to statutory cancellation policies, and by monitoring and pursuing collections from past due accounts. We cancel policies at the earliest permissible date allowed by the statutory cancellation regulations.

Approximately 62% and 59% of the Company’s business activity is with customers located in Florida for 2024 and 2023, respectively. Approximately 10% and 12% of the Company’s business activity is with customers located in Georgia for 2024 and 2023, respectively. Approximately 9% and 12% of the Company's business activity is with customers located in North Carolina for 2024 and 2023, respectively. Approximately 11% and 10% of the Company's business activity is with customers located in South Carolina for 2024 and 2023, respectively. There were no other significant regional, industrial or group concentrations during the three months ended March 31, 2024 and 2023.

Cash Surrender Value of Life Insurance

The Company is the owner and beneficiary of a life insurance policy on its president. The cash surrender value relative to the policy in place at March 31, 2024 and December 31, 2023 was $658,414 and $650,237, respectively. In March 2024, the Company executed a $641,934 loan against the life insurance policy. The loan accrues interest at a blended interest rate of 6.64% and has no maturity date. The loan was funded in April 2024.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:

Furniture and equipment 5 - 7 years

Computer equipment and software 3 - 5 years

Leasehold improvements 10 years

Fair Value of Financial Instruments

The Company’s carrying amounts of financial instruments as defined by Financial Accounting Standards Board (“FASB”) ASC 825, “Disclosures about Fair Value of Financial Instruments”, including premium finance contracts and related receivables, prepaid expenses, drafts payable, accrued expenses and other current liabilities, approximate their fair value due to the relatively short period to maturity for these instruments. The fair value of the line of credit and notes payable are based on current rates at which the Company could borrow funds with similar remaining maturities and the carrying value approximates fair value.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

2. Summary of Significant Accounting Policies (Continued)

Income Taxes

The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets and liabilities are expected to be realized or settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Uncertain tax positions are recognized only when the Company believes it is more likely than not that the tax position will be upheld on examination by the taxing authorities based on the merits of the position. The Company has no material unrecognized tax benefits and no adjustments to its consolidated financial position, results of operations or cash flows were required as of March 31, 2024

Tax returns are open to examination by taxing authorities for three years after filing. No income tax returns are currently under examination by taxing authorities. SPFMC and SPFH recognize interest and penalties, if any, related to uncertain tax positions in income tax expense. SPFMC and SPFH did not have any accrued interest or penalties associated with uncertain tax positions as of March 31, 2024 and December 31, 2023.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with FASB ASC Topic No. 718, “Stock Compensation,” which establishes the requirements for expensing equity awards. The Company measures and recognizes as compensation expense the fair value of all share-based payment awards based on estimated grant date fair values. Our stock-based compensation includes issuances made to directors, executives, employees and consultants, which includes employee stock options related to our 2019 Equity Incentive Plan and stock warrants. The determination of fair value involves a number of significant estimates. We use the Black-Scholes option pricing model to estimate the value of employee stock options and stock warrants which requires a number of assumptions to determine the model inputs. These include the expected volatility of our stock and employee exercise behavior which are based expectations of future developments over the term of the option.

Earnings per Common Share

The Company accounts for earnings (loss) per share in accordance with FASB ASC Topic No. 260 - 10, “Earnings Per Share”, which establishes the requirements for presenting earnings per share (“EPS”). FASB ASC Topic No. 260 - 10 requires the presentation of “basic” and “diluted” EPS on the face of the statement of operations. Basic EPS amounts are calculated using the weighted-average number of common shares outstanding during each period. Diluted EPS assumes the exercise of all stock options, warrants and convertible securities having exercise prices less than the average market price of the common stock during the periods, using the treasury stock method.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

2. Summary of Significant Accounting Policies (Continued)

For each of the three months ended March 31, 2024 and 2023, stock options to purchase 207,400 shares of common stock were outstanding and stock warrants to purchase 1,035,000 shares of common stock were outstanding as described in Note 11. 93,700 of these options vested on March 1, 2021, 93,700 stock options vested on March 1, 2022, 10,000 stock options vested on June 29, 2023, and the remaining 10,000 stock options vest on June 29, 2024. All the stock warrants vested immediately. The following table summarizes the effects of the outstanding options and warrants on earnings per share:


	March 31, 2024 (unaudited)		March 31, 2023 (unaudited)
Options included in the calculation of diluted EPS		187,400		187,400
Vested but antidilutive options		10,000		—
Nonvested options		10,000		20,000
Total options outstanding		207,400		207,400

Warrants included in the calculation of diluted EPS		—		635,000
Vested but antidilutive warrants		1,035,000		400,000
Total warrants outstanding		1,035,000		1,035,000

The Series A Convertible Preferred Stock can be converted to common stock at 80% of the prevailing market price over the previous 30-day period at the option of the Company. This preferred stock is anti-dilutive as of March 31, 2024 and December 31, 2023, and excluded from dilutive earnings per share.

Leases

The Company recognizes and measures its leases in accordance with ASC Topic 842, “Leases”. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company recognizes a lease liability and a right of use (ROU) asset at the commencement date of the lease. The lease liability is initially and subsequently recognized based on the present value of its future lease payments calculated using the Company’s incremental borrowing rate.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts on an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exceptions. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company did not experience any impact on the consolidated financial statements from the adoption of the standard.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments," which replaces the existing "incurred loss" model for recognizing credit losses with an "expected loss" model referred to as the CECL model. Under the CECL model, the Company is required to present certain financial assets carried at amortized cost, such as insurance premium finance loans held for investment, at the net amount expected to be collected. The measurement of expected credit losses is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company adopted this standard in the first fiscal quarter of 2023. There has been no impact on current earnings due to the adoption of this standard.

3. Premium Finance Contracts, Related Receivable and Allowance for Credit Losses

Premium Finance Contracts and Related Receivable represent monthly payments due on insurance premium finance contracts. The Company finances insurance policies over periods from three months to one year for businesses and consumers who make an initial down payment of, on average, 25 percent of the insurance policy amounts. The entire amount of the contract is recorded including amounts due for finance charges and services charges. These receivables are reported net of unearned interest for financial statements purposes. Amounts due from agents represent balances related to (1) an agent’s unearned commission due to a policy cancellation and (2) down payments collected by the agents on behalf of the insured, which are due to us. Receivables from insurance premium finance contracts cancelled are due from the insurance companies.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

3. Premium Finance Contracts, Related Receivable and Allowance for Credit Losses (Continued)

At March 31, 2024 and December 31, 2023, premium finance contract and agents’ receivable consists of the following:


Description	March 31, 2024			December 31, 2023
Insurance premium finance contracts outstanding	$	63,752,872		$	57,769,501
Insurance premium finance contracts cancelled		4,668,758			5,832,574
		68,421,630			63,602,075
Amounts due from agents		872,586			804,131
Less: Unearned interest		(2,465,503	)		(2,164,914	)
		66,828,713			62,241,292
Less: Allowance for credit losses		(1,599,435	)		(1,501,593	)

Total	$	65,229,278		$	60,739,699

The allowance for credit losses at March 31, 2024 and December 31, 2023 are as follows:

Schedule of allowance for credit losses
	March 31, 2024		December 31, 2023
Allowance for premium finance contracts	$	1,433,999	$	1,336,157
Allowance for amounts due from agents		165,436		165,436

Total allowance for credit losses	$	1,599,435	$	1,501,593

Activity in the allowance for credit losses for the three months ended March 31, 2024 and the year ended December 31, 2023 are as follows:


	March 31, 2024			December 31, 2023
Balance at the beginning of the year	$	1,501,593		$	1,129,498
Current year provision		424,000			1,669,000
Direct write-downs charged against the allowance		(375,586	)		(1,639,416	)
Recoveries of amounts previously charged off		49,428			342,511

Balance at end of the year	$	1,599,435		$	1,501,593

The Company maintains a gross allowance, which includes allowances for write-offs of unearned revenues. The provisions and write-offs per this footnote are also displayed at gross amounts. These write-offs are split between the principal (i.e. provision for credit losses) and interest/fee (i.e. contra-revenue) portions on the consolidated statement of operations. The following table shows a reconciliation between the gross provision per this footnote and the provision for credit losses on the consolidated statement of operations:

Schedule of provision for credit losses
	For the three months ended March 31,
	2024 (unaudited)			2023 (unaudited)
Current additions to the allowance	$	424,000		$	366,000
Less: Contra-revenues		(198,887	)		(174,147	)
Provision for credit losses	$	225,113		$	191,853

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

3. Premium Finance Contracts, Related Receivable and Allowance for Credit Losses (Continued)

The aging analyses of contract receivables as of March 31, 2024 and December 31, 2023 are as

follows:


							Greater
As of March 31, 2024	30–59 Days		60–89 Days		90-119 Days		Than 120 Days		Total Past-Due		Current		Grand Total
Premium finance contracts:
Outstanding	$	62,648	$	8,705	$	4,971	$	6,582	$	82,906	$	63,669,966	$	63,752,872
Cancelled		723,332		602,893		347,765		2,221,425		3,895,415		773,343		4,668,758
Total	$	785,980	$	611,598	$	352,736	$	2,228,007	$	3,978,321	$	64,443,309	$	68,421,630

							Greater
As of December 31, 2023	30–59 Days		60–89 Days		90-119 Days		Than 120 Days		Total Past-Due		Current		Grand Total
Premium finance contracts:
Outstanding	$	147,915	$	2,241	$	7,536	$	30,086	$	187,778	$	57,581,723	$	57,769,501
Cancelled		1,041,232		976,535		456,897		1,913,339		4,388,003		1,444,571		5,832,574
Total	$	1,189,147	$	978,776	$	464,433	$	1,943,425	$	4,575,781	$	59,026,294	$	63,602,075

4. Property and Equipment, Net

The Company’s property and equipment consists of the following:

Schedule of property and equipment
	March 31, 2024
	(unaudited)			December 31, 2023

Computer Software	$	26,207		$	26,207
Automobile		180,815			155,881
Furniture & Fixtures		14,273			14,273
Leasehold Improvements		116,811			116,811
Computer Equipment		74,879			73,145
Property and equipment, gross		412,985			386,317
Accumulated depreciation		(271,784	)		(263,817	)
Property and equipment, net	$	141,201		$	122,500

The Company recorded depreciation expense in other operating expenses of $7,967 and $6,257, respectively for the three months ended March 31, 2024 and 2023.

5. Leases

The Company accounts for leases in accordance with ASC Topic 842. In March 2024, the Company renewed its office lease with Marlenko Acquisitions, LLC. The new two-year lease is identical to the previous lease and expires on February 28, 2026 with a one-year option to renew. The right-of-use asset and operating lease liability at the execution of this lease totaled $235,335. The Company used its incremental borrowing rate of 5.25% for all operating leases as of March 31, 2024 and December 31, 2023.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

5. Leases (Continued)

Office lease – On March 1, 2024, the Company entered into a two (2) year lease for an office facility located in Miami Florida with an entity controlled by our CEO and related parties. The lease has a one-time renewal option for one year which management is reasonably certain will be exercised. The lease is $7,048 per month and expires in February 2026, including the renewal option (see Note 12).

Secure facility lease – On September 26, 2022, the Company entered into a three (3) year lease for a secure facility located in Miami, Florida. The lease has no renewal option. The lease is $1,418 per month, with payment increases of 4% annually, and expires in September 2025. The right-of-use asset and operating lease liability at the execution of this lease totaled $48,979.

Copier lease – On October 14, 2019 the Company entered into a copier lease. The right to use asset and lease liability at inception of the copier lease was $68,799. The Company used its incremental borrowing rate of 5.25% to determine the present value of the lease payment. The cost of the copier lease is $1,116 per month and expires October 14, 2024 with a one-year renewal option which the Company expects to exercise.

Hardware lease – On September 30, 2022, the Company entered into a three-year lease for computer hardware. The lease has no renewal option. The lease is $664 per month and expires in September 2025. The right-of-use asset and operating lease liability at the execution of this lease totaled $22,059.

Server lease – On December 7, 2021, the Company entered into a five-year 5 lease for a computer server. The lease contains a bargain purchase option, which the Company intends to exercise. The Company recorded this lease as a finance lease. The fixed asset and lease liability at inception of the lease was $66,281 and $65,801, respectively. The Company used its incremental borrowing rate of 5.25% to determine the present value of the lease payment. The lease payments are $1,249 per month through December 2026.

Schedule of leases
		March 31, 2024
Leases	Classification	(unaudited)		December 31, 2023

Right-of-use assets	Operating lease assets	$	286,196	$	80,840
Server lease	Finance lease assets		35,350		38,664
Total lease assets		$	321,546	$	119,504

Current operating lease liability	Current operating lease liabilities	$	117,997	$	50,594
Non-current operating lease liability	Long-term operating lease liabilities		168,199		30,246
Total operating lease liabilities		$	286,196	$	80,840

Current finance lease liability	Current finance lease liabilities	$	13,340	$	13,166
Non-current finance lease liability	Long-term finance lease liabilities		23,992		27,393
Total finance lease liabilities		$	37,332	$	40,559

The weighted-average remaining lease term was 2.64 years and 1.97 years as of March 31, 2024 and December 31, 2023, respectively. For the three months ended March 31, 2024 and 2023, the total lease cost was $34,655 and $30,056, respectively.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

6. Drafts Payable

Drafts payable outstanding represent unpaid drafts that have not been disbursed by our senior lender as of the reporting date, on insurance premium finance contracts received by the Company prior to the reporting date. As of March 31, 2024 and December 31, 2023, the draft payable balances are $4,015,933 and $2,681,359, respectively.

7. Line of Credit

Relationship with First Horizon Bank (“FHB”)

On February 3, 2021, the Company entered into an exclusive twenty-four month loan agreement with First Horizon Bank, our senior lender, for a revolving line of credit in the amount of $35,000,000, which was immediately funded for $25,974,695 to pay off the prior line of credit. On this date, the prior line of credit was fully repaid and terminated. The Company recorded $180,350 of loan origination costs. In October 2021, the Company increased its line of credit with First Horizon Bank from $35,000,000 to $45,000,000. The Company recorded $25,771 of line of credit costs related to the credit increase. In November 2022, the Company extended the maturity on its line of credit agreement with FHB until November 30, 2025. This extension also changed the Index Rate of the line of credit from 30-Day Libor to 30-Day Secured Overnight Financing Rate (“SOFR”). The Company recorded $117,228 of line of credit costs related to this extension, which is included in the line of credit balance in the consolidated balance sheet at March 31, 2024.

At March 31, 2024 and December 31, 2023, the advance rate was 85% of the aggregate unpaid balance of the Company’s eligible accounts receivable. The line of credit is secured by all the Company’s assets and is personally guaranteed by our CEO and two members of the Board of Directors of the Company. The line of credit is secured by all Company assets and is personally guaranteed by our CEO and two directors of the Company. The line of credit bears interest at 30-Day SOFR plus 2.55-2.96% per annum (8.29% at March 31, 2024 and 8.09% at December 31, 2023). The terms of the Line of Credit agreement provide for a minimum interest of 3.35% when the 30-day SOFR falls below 0.50%. As of March 31, 2024, the amount of principal outstanding on the line of credit was $44,739,861 and is reported on the consolidated balance sheet net of $2,627 of unamortized loan origination fees. As of December 31, 2023, the amount of principal outstanding on the line of credit was $42,377,736 and is reported on the consolidated balance sheet net of $3,021 of unamortized loan origination fees. Interest expense on this line of credit for the three months ended March 31, 2024 and 2023 totaled approximately $911,000 and $586,000, respectively. The Company recorded amortized loan origination fees for the three months ended March 31, 2024 and 2023 of $394 and $28,519, respectively, which is included in interest expense. Availability on this line of credit was $260,139 as of March 31, 2024.

The Company’s agreements with FHB contain certain financial covenants and restrictions. Under these restrictions, all the Company’s assets are pledged to secure the line of credit, the Company must maintain certain financial ratios such as an adjusted tangible net worth ratio, interest coverage ratio and adjusted leverage ratio. The loan agreement also provides for certain covenants such as audited financial statements, notice of change of control, budget, permission for any new debt, and copies of filings with regulatory bodies. On November 14, 2023, the Company executed an amendment of the loan agreement, which provided a waiver of default on its Interest Coverage Ratio as of September 30, 2023. The amendment also reduced the Minimum Interest Coverage Ratio for the following four quarters through September 30, 2024. Management believes it was in compliance with the applicable debt covenants as of March 31, 2024 and December 31, 2023.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

8. PPP Loan

On April 18, 2020, the Company entered into a $271,000 loan with Woodforest National Bank, under a program administered by the Small Business Administration (“SBA”) as part of the Paycheck Protection Program (“PPP”) approved under the “Coronavirus Aid, Relief, and Economic Security Act” (“CARES Act”) (Pub. L. No. 116-136). The loan matures in two (2) years and accrues interest at 1% from the origination of the loan. After a 6-month deferral, interest and principal payments are due monthly. The Note is subject to partial or full forgiveness, the terms of which are dictated by the SBA, the CARES Act, section 7(a)(36) of the Small Business Act, all rules and regulations promulgated thereunder including, without limitation, Interim Final Rule RIN 3245-AH34, subsequent SBA guidance, and the Code of Federal Regulations.

On June 22, 2022, the Company executed a loan modification with Woodforest National Bank (“WNB”) allowing for the repayment of the PPP loan to WNB. The modified loan has a maturity date of April 18, 2025 with a 1% fixed interest rate and monthly principal and interest payments of $7,801.12 beginning on May 18, 2022. For the three months ended March 31, 2024 and 2023, the Company paid interest on this loan of $521 and $107, respectively, which is included in interest expense. As of March 31, 2024 and December 31, 2023, the balance of the PPP loan is as follows:

Schedule of balance of the PPP loan
	March 31, 2024 (unaudited)			December 31, 2023
Total PPP loan	$	116,229		$	123,924
Less current maturities		(108,435	)		(92,785	)
Long-term portion of PPP loan	$	7,794		$	31,139

9. Notes Payable

At March 31, 2024 and December 31, 2023, the balances of long-term unsecured notes to unrelated parties are as follows:


	March 31, 2024
	(unaudited)			December 31, 2023
Total notes payable - Others	$	7,342,255		$	6,865,557
Less current maturities		(2,939,400	)		(2,181,400	)

Long-term maturities	$	4,402,855		$	4,684,157

These are notes payable to individuals. The notes have interest payable monthly, ranging from 6% to 8% per annum and are unsecured and subordinated. The principal is due on various dates through March 31, 2028. The maturity date of these notes automatically extends for periods of one to four years unless the note holder requests repayment through written instructions at least ninety days prior to the maturity date of the note. The automatic maturity extension of these notes is considered a loan modification. Interest expense on these notes totaled approximately $126,000 and $128,000 during the three months ended March 31, 2024 and 2023, respectively. The Company received proceeds on these notes of $518,699 and $25,000 for the three months ended March 31, 2024 and 2023, respectively. The Company repaid principal on these notes of $42,000 and $242,000 for the three months ended March 31, 2024 and 2023, respectively.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

10. Notes Payable – Stockholders and Related Parties

At March 31, 2024 and December 31, 2023, the balances of long-term notes payable to stockholders and related parties are as follows:


	March 31, 2024
	(unaudited)			December 31, 2023
Total notes payable - Related parties	$	2,486,000		$	2,088,000
Less current maturities		(355,000	)		(310,000	)

Long-term maturities	$	2,131,000		$	1,778,000

These are notes payable to stockholders and related parties. The notes have interest payable monthly ranging from 8% per annum and are unsecured and subordinated. The principal is due on various dates through March 31, 2028. The maturity date of these notes automatically extends for periods of one to four years unless the note holder requests repayment through written instructions at least ninety days prior to the maturity date of the note. The automatic maturity extension of these notes is considered a loan modification. Interest expense on these notes totaled approximately $44,000 and $39,000 during the three months ended March 31, 2024 and 2023, respectively. The Company received proceeds on these notes of $398,000 and $30,000 for the three months ended March 31, 2024 and 2023, respectively. The Company repaid principal on these notes of $0 and $27,000 for the three months ended March 31, 2024 and 2023, respectively.

11. Equity

Preferred Stock

As of March 31, 2024, the Company was authorized to issue 20 million shares of preferred stock with a par value of $0.001 per share, of which 600,000 shares had been designated as Series A convertible and 166,000 shares had been issued and are outstanding.

In the event of any liquidation, dissolution or winding up of the Company, the holders of preferred stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of common stock, an amount equal to $10 for each share of preferred stock, plus all unpaid dividends that have been accrued, accumulated or declared. As of March 31, 2024, the total liquidation preference on the preferred stock is $1,689,050. The Company may redeem the preferred stock from the holders at any time following the second anniversary of the closing of the original purchase of the preferred stock. The Series A Convertible Preferred Stock can be converted to common stock at 80% of the prevailing market price over the previous 30-day period at the option of the Company.

Holders of preferred stock are entitled to receive preferential cumulative dividends, only if declared by the board of directors, at a rate of 7% per annum per share of the liquidation preference amount of $10 per share. During the three months ended March 31, 2024 and 2023, the Board of Directors has declared and paid dividends on the preferred stock of $29,050 and $29,050, respectively. As of March 31, 2024 and December 31, 2023, preferred dividends are in arrears by $29,050 and $29,050, respectively.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

11. Equity (Continued)

December 31, 2022 dividends in arrears were declared and paid in January 2023. March 31, 2023 dividends in arrears were declared and paid in April 2023. June 30, 2023 dividends in arrears were declared and paid in July 2023. September 30, 2023 dividends in arrears were declared and paid in October 2023. December 31, 2023 dividends in arrears were declared and paid in January 2024. March 31, 2024 dividends in arrears were declared and paid in May 2024.

Common Stock

As of both March 31, 2024 and December 31, 2023, the Company was authorized to issue 100 million shares of common stock with a par value of $0.001 per share, of which 2,905,016 shares were issued and outstanding.

Stock Options

In 2019, the Company’s Board of Directors approved the creation of the 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan provides for the issuance of incentive stock options to designated employees, certain key advisors and non-employee members of the Board of Directors with the opportunity to receive grant awards to acquire, in the aggregate, up to 300,000 shares of the Corporation’s common stock.

The following table summarizes information about employee stock options outstanding at March 31, 2024:

	Schedule of employee stock options
		Outstanding Options				Vested Options
	Exercise Price	Number Outstanding at March 31, 2024	Weighted Average Remaining Term		Weighted Average Exercise Price	Number Exercisable at March 31, 2024	Weighted Average Remaining Term		Weighted Average Exercise Price
$	0.80	187,400	5.92	$	0.80	187,400	5.92	$	0.80
$	4.50	10,000	8.25	$	4.50	5,000	8.25		4.50
$	4.95	10,000	3.24	$	4.95	5,000	3.24		4.95
	Outstanding options	207,400	5.90 years	$	1.18	197,400	5.90 years	$	1.00

A summary of information regarding the stock options outstanding is as follows:

Schedule of stock options outstanding
		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
	Outstanding at December 31, 2023		207,400	$	1.18		6.15 years	$	705,224
	Issued		—		—		—		—
	Exercised		—		—		—		—
	Outstanding at March 31, 2024		207,400	$	1.18		5.90 years	$	462,878
	Exercisable at March 31, 2024		197,400	$	1.00		5.90 years	$	462,878

During each of the three months ended March 31, 2024 and 2023, the Company recognized $7,050 of stock option expense.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

11. Equity (Continued)

Stock Warrants

A summary of information regarding the stock warrants outstanding is as follows:

Schedule of stock warrants
		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
	Outstanding at December 31, 2023		1,035,000	$	7.09		1.6 years	$	355,600
	Issued		—		—		—		—
	Exercised		—		—		—		—
	Outstanding at March 31, 2024		1,035,000	$	7.09		1.33 years		—
	Exercisable at March 31, 2024		1,035,000	$	7.09		1.33 years		—

The warrants vested immediately. During each of the three months ended March 31, 2024 and 2023, the Company recognized no stock warrant expense.

12. Related Party Transactions

The Company has engaged in transactions with related parties primarily shareholders, officers and directors and their relatives that involve financing activities and services to the Company. The following discussion summarizes its activities with related parties.

Office lease

The Company entered a three-year lease for its office space in Miami, FL with an entity that is controlled by our CEO and related parties. The Company leases approximately 3,000 square feet of office space. Rent of $7,048 is paid monthly. The lease contract expires in February 2026.

Line of credit

As discussed in Note 7, the Company secured its primary financing in part through the assistance of our CEO and two board members who guaranteed the loan to the financial institution. The current line of credit with First Horizon Bank was initiated at $35,000,000. In October 2021, the Company increased its line of credit with First Horizon Bank from $35,000,000 to $45,000,000. In November 2022, the Company extended the maturity of its line of credit with First Horizon Bank until November 30, 2025.

Notes payable

As discussed in Note 10, the Company has been advanced funds by its shareholders. As of March 31, 2024 and December 31, 2023, the amounts advanced were $2,131,000 and $1,778,000, respectively.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(unaudited)

12. Related Party Transactions (Continued)

Stock options

As discussed in Note 11, on June 29, 2022, the Company issued 20,000 stock options to officers and directors under the terms of the 2019 Equity Incentive Plan. The total impact on earnings from this transaction is $56,400, which is being amortized over 24 months at a rate of $2,350 per month. This transaction will also increase additional paid-in capital over the same period at the same rate.

13. Commitments and Contingencies

On June 29, 2022, the Company signed “at-will” employment agreements with its CEO and CFO, which include fixed salary increases over the next five years and performance-based equity compensation. At the execution of the agreements, the Company issued a total of 20,000 stock options for the purchase of common stock pursuant to its 2019 Equity Incentive Plan. These stock options vest over a two-year period.

From time-to-time, we may be involved in litigation or be subject to claims arising out of our operations or content appearing on our websites in the normal course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on our company because of defense and settlement costs, diversion of management resources and other factors.

14. Subsequent Events

In April 2024, the Company issued $620,000 of notes payable – related party, issued $325,652 of notes payable, and repaid $10,000 of notes payable. In May 2024, the Company repaid $10,000 of notes payable.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

We are an insurance premium financing company, specializing primarily in commercial policies. We make it efficient for companies to access financing for insurance premiums. Enabled by our network of marketing representatives and relationships with insurance agents, we provide a value-driven, customer-focused lending service.

We have offered premium financing since 1991 through our wholly owned subsidiary, Standard Premium Finance Management Corporation. We are generally targeting premium financing loans from $1,000 to $50,000, with repayment terms ranging from 6 to 10 months, although we may offer larger loans in cases we deem appropriate. Qualified customers may have multiple financings with us concurrently, which we believe provides opportunities for repeat business, as well as increased value to our customers.

We originate loans primarily in Florida, although we operate in several states. Over the past three years, the Company has expanded its operations, and currently is financing insurance premiums in Arizona, Colorado, Florida, Georgia, Maryland, North Carolina, Pennsylvania, South Carolina, Texas, and Virginia. Throughout 2023, we obtained licenses in fourteen additional states. We intend to continue to expand our market into new states as part of our organic growth trend. Loans are originated primarily through a network of insurance agents solicited by our in-house sales team and marketing representatives.

We generate the majority of our revenue through interest income and the associated fees earned from our loan products. We earn interest based on the “rule of 78” and earn other associated fees as applicable to each loan. These fees include, but are not limited to, a one-time finance charge, late fees, and NSF fees. Our company charges interest to its customers solely by the Rule of 78. Charging interest per the Rule of 78 is the industry standard among premium finance loans. The Rule of 78 is a method to calculate the amount of principal and interest paid by each payment on a loan with equal monthly payments. The Rule of 78 is a permissible method of calculating interest in the states in which we operate. The Rule of 78 recognizes greater amounts of interest income and lesser amounts of principal repayment during the first months of the loan, while decreasing interest income and increasing principal repayment during the final months of the loan. Whenever a loan is repaid prior to full maturity, the Rule of 78 methodology is applied and the borrower is refunded accordingly.

We rely on a diversified set of funding sources for the loans we make to our customers. Our primary source of financing has historically been a line of credit at a bank collateralized by our loan receivables and our other assets. We receive additional funding from unsecured subordinate noteholders that pays monthly interest to the investors. We have also used proceeds from operating cash flow to fund loans in the past and continue to finance a portion of our outstanding loans with these funds. See Liquidity and Capital Resources for additional information regarding our financing strategy.

The Company’s main source of funding is its line of credit, which represented approximately 66% ($44,737,234) of its capital and total liabilities as of March 31, 2024. As of March 31, 2024, the Company’s subordinated notes payable and PPP loan represented approximately 15% ($9,944,484) of the Company’s capital and total liabilities, operating liabilities provide approximately 9% ($6,310,720) of the Company’s capital and total liabilities, preferred equity provides approximately 3% ($1,660,000) of the Company’s capital and total liabilities, and equity in retained earnings and common stock paid-in capital represents the remaining 7% ($4,833,646) of the Company’s capital and total liabilities.

Key Financial and Operating Metrics

We regularly monitor a series of metrics in order to measure our current performance and project our future performance. These metrics aid us in developing and refining our growth strategies and making strategic decisions.

	As of or for the Three Months Ended March 31,
	2024 (unaudited)			2023 (unaudited)
Gross Revenue	$	2,829,953		$	2,078,804
Originations	$	39,215,406		$	30,910,034
Interest Earned Rate		17.2	%		16.5	%
Cost of Funds Rate, Gross		7.92	%		7.22	%
Cost of Funds Rate, Net		6.60	%		5.56	%
Reserve Ratio		2.18	%		1.94	%
Provision Rate		0.57	%		0.62	%
Return on Assets		0.55	%		0.30	%
Return on Equity		7.21	%		3.69	%

Gross Revenue

Gross Revenue represents the sum of interest and finance income, associated fees and other revenue.

Originations

Originations represent the total principal amount of Loans made during the period.

Interest Earned Rate

The Interest Earned Rate is the average annual percentage interest rate earned on new loans.

Cost of Funds Rate, Gross

Cost of Funds Rate, Gross is calculated as interest expense divided by average debt outstanding for the period.

Cost of Funds Rate, Net

Cost of Funds Rate, Net is calculated as interest expense divided by average debt outstanding for the period, net of the interest related tax benefit.

Reserve Ratio

Reserve Ratio is our allowance for credit losses at the end of the period divided by the total amount of principal outstanding on Loans at the end of the period. It excludes net deferred origination costs and associated fees.

Provision Rate

Provision Rate equals the provision for credit losses for the period divided by originations for the period. Because we reserve for probable credit losses inherent in the portfolio upon origination, this rate is significantly impacted by the expectation of credit losses for the period’s originations volume. This rate is also impacted by changes in loss expectations for contract receivables originated prior to the commencement of the period.

Return on Assets

Return on Assets is calculated as annualized net income (loss) attributable to common stockholders for the period divided by average total assets for the period.

Return on Equity

Return on Equity is calculated as annualized net income (loss) attributable to common stockholders for the period divided by average stockholders’ equity attributable to common stockholders for the period.

RESULTS of OPERATIONS

Results of Operations for the Three Months ended March 31, 2024 Compared to the Three Months ended March 31. 2023

Revenue

Revenue increased by 36.1% overall or $751,149 to $2,829,953 for the three months ended March 31, 2024 from $2,078,804 for the three months ended March 31, 2023. The increase in revenue was primarily due to a 41.0% or $713,257 increase in finance charges and a 12.2% or $30,141 increase in late charges. Revenue from finance charges comprised 86.6% and 83.6% of overall revenue for the three months ended March 31, 2024 and 2023, respectively.

During the three months ended March 31, 2024 compared to the three months ended March 31, 2023, the company financed an additional $8,305,372 in new loan originations. This increase was due largely to increased marketing efforts throughout our established states and new states. The total quantity of loan originations increased by 456 for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The quantity of loan originations is directly correlated to the origination charge revenue, as the Company immediately recognizes an origination fee on substantially all new loans.

Under the terms of the line of credit agreement, the loan receivables and our other assets provide the collateral for the loan. As the receivables increase, driven by new sales, the company has greater borrowing power, giving it the opportunity to generate additional sales. In November 2022, the Company extended the maturity of this line of credit until November 30, 2025. See Future Cash Requirements for the Company’s strategy regarding its line of credit.

Expense

Expenses increased by 33.3% or $666,303 to $2,665,359 for the three months ended March 31, 2024 from $1,999,056 for the three months ended March 31, 2023.

The increase in expenses was primarily due to increases in the following categories:

	·	$291,513 increase in interest expense as a result of increases in the line of credit interest rate and increased borrowings on the line of credit to fund growth in the loan portfolio. Due to benchmark interest rate increases adopted by the Federal Reserve Board throughout 2022 and 2023, interest rates throughout the marketplace have increased accordingly. Our line of credit features a variable interest rate based on one-month SOFR. As of March 31, 2024 and 2023, our line of credit’s interest rate was 8.29% and 7.42%, respectively. Furthermore, as of March 31, 2024, our net borrowings on the line of credit had increased by $10,079,329 to $44,737,234 from $34,657,905 at March 31, 2023. This increase in borrowings is due primarily to increased loan originations.
	·	$144,108 increase in commissions as a result of increased loan originations because commissions are correlated with the amount of loan originations.
	·	$68,551 increase in salaries and wages expense primarily related to the hiring of additional marketing representatives in new and existing territories.

Income before Taxes

Income before taxes increased by $84,846 to $164,954 for the three months ended March 31, 2024 from $79,748 for the three months ended March 31, 2023. This increase was attributable to the net increases and decreases as discussed above.

Income Tax Provision

Income tax provision increased by $34,924 to $45,792 for the three months ended March 31, 2024 from $10,868 for the three months ended March 31, 2023. This increase was primarily attributable to the increase in taxable income.

Net Income

Net Income increased by $49,922 to $118,802 for the three months ended March 31, 2024 from $68,880 for the three months ended March 31, 2023. This increase was attributable to the $84,846 increase in income before taxes related primarily to increased revenues, partially offset by the $34,924 increase in the provision for income taxes.

LIQUIDITY and CAPITAL RESOURCES as of March 31, 2024

We had $1,144 of cash and a working capital surplus of $11,694,325 at March 31, 2024. A significant working capital surplus is generally expected through the normal course of business due primarily to the difference between the balance in loan receivables and the related line of credit liability. As discussed in the Revenues section, the Company’s line of credit is currently the primary source of operating funds. In February 2021, the Company entered into a contract with a new lender, First Horizon Bank, for a two-year $35,000,000 line of credit. In October 2021, the Company further increased its borrowing power on its line of credit to $45,000,000, an increase of $10,000,000. In November 2022, the Company extended the maturity of this line of credit until November 30, 2025 and replaced the benchmark rate of the loan from 30-day LIBOR to 30-day SOFR (Secured Overnight Financing Rate). LIBOR ceased to be published after June 30, 2023. The terms of the amended line of credit include an interest rate based on the 30-day SOFR rate plus an applicable margin of 2.55% - 2.96%, with a minimum rate of 3.35%. The applicable margin is based on the Company’s ratio of total liabilities to tangible net worth. As of March 31, 2024, the Company’s applicable margin was 2.96%. On November 14, 2023, the Company executed an amendment of the loan agreement, which provided a waiver of default on its Interest Coverage Ratio as of September 30, 2023. The amendment also reduced the Minimum Interest Coverage Ratio for the following four quarters through September 30, 2024. We anticipate that the interest rate we pay on our revolving credit agreement will remain elevated due to the recently adopted benchmark interest rate increases by the Federal Reserve Board. We believe that we will be able to pass along a portion of the interest rate increase on loans funded after the interest rate increase so that material effects to our net interest spread can be mitigated. Furthermore, because of the short-term nature of our loans, we are not bound to any particular loan and its fixed interest rate for a long period of time. Based on our estimates and taking into account the risks and uncertainties of our plans, we believe that we will have adequate liquidity to finance and operate our business and repay our obligations as they become due in the next 12 months.

During the three months ended March 31, 2024, the Company raised an additional $398,000 in subordinated notes payable – related parties and $518,698 in subordinated notes payable. The Company repaid $42,000 of notes payable. The Company utilizes its inflows from subordinated debt as a financing source before drawing additionally from the line of credit.

Future Cash Requirements

As the Company anticipates its growth patterns to continue, the larger line of credit is paramount to fueling this growth. The Company’s line of credit is $45,000,000 and its maturity on its line of credit facility is November 30, 2025. The extended maturity provides stability for the Company’s future cash requirements.

Uses of Liquidity and Capital Resources

We require cash to fund our operating expenses and working capital requirements, including costs associated with our premium finance loans, capital expenditures, debt repayments, acquisitions (if any), pursuing market expansion, supporting sales and marketing activities, and other general corporate purposes. While we believe we have sufficient liquidity and capital resources to fund our operations and repay our debt, we may elect to pursue additional financing activities such as refinancing or expanding existing debt or pursuing other debt or equity offerings to provide flexibility with our cash management and provide capital for potential acquisitions.

Off-balance Sheet Arrangements

None.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We consider the following to be our most critical accounting policy because it involves critical accounting estimates and a significant degree of management judgment:

Allowance for credit losses

We are subject to the risk of loss associated with our borrowers’ inability to fulfill their payment obligations, the risk that we will not collect sufficient unearned premium refunds on the cancelled policies on the defaulted loans to fully cover the unpaid loan principal and the risk that payments due us from insurance agents and brokers will not be paid.

The carrying amount of the Premium Finance Contracts (“Contracts”) is reduced by an allowance for credit losses that are maintained at a level which, in management’s judgment, is adequate to absorb losses inherent in the Contracts. The amount of the allowance is based upon management’s evaluation of the collectability of the Contracts, including the nature of the accounts, credit concentration, trends, and historical data, specific impaired Contracts, economic conditions, and other risks inherent in the Contracts. The allowance is increased by a provision for credit losses, which is charged to expense, and reduced by charge-offs, net of recovery.

In addition, additional scrutiny is placed on accounts over 120 days to determine whether specific allowances should be maintained. Individual contracts are written off against the allowance when collection of the individual contracts appears doubtful. The collectability of outstanding and cancelled contracts is generally secured by collateral in the form of the unearned premiums on the underlying policies and accordingly historical losses are approximately 1% to 1.5% of the principal amount of loans made each year. The Company considers historical losses as well as forward-looking attributes in determining the adequacy of the allowance for credit losses. The collectability of amounts due from agents is determined by the financial strength of the agency.

Stock-Based Compensation

We account for stock-based compensation by measuring and recognizing as compensation expense the fair value of all share-based payment awards made to directors, executives, employees and consultants, including employee stock options related to our 2019 Equity Incentive Plan and stock warrants based on estimated grant date fair values. The determination of fair value involves a number of significant estimates. We use the Black Scholes option pricing model to estimate the value of employee stock options and stock warrants which requires a number of assumptions to determine the model inputs. These include the expected volatility of our stock and employee exercise behavior which are based expectations of future developments over the term of the option.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2024. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at March 31, 2024 at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2024 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company becomes involved in various legal proceedings and claims in the normal course of business. In management’s opinion, the ultimate resolution of these matters will not have a material effect on our financial position or results of operations.

Item 1A. Risk Factors.

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I. “Item 1A. Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) on March 15, 2024 (“2023 Form 10-K”), which could adversely affect our business, financial condition, results of operations and cash flows. During the three months ended March 31, 2024, there have been no material changes in our risk factors disclosed in our 2023 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the three months ended March 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 arrangement” as defined in Item 408(c) of Regulation S-K.

Item 6. Exhibits.

Exhibit Index

Exhibit Number		Description
2.1		Agreement of Share Exchange dated as of March 22, 2017 by and between Registrant, Standard Premium Finance Management Corporation and the shareholders of Standard Premium Finance Management Corporation. (Incorporated by reference to Exhibit 2.1 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
3.1		Articles of Incorporation of Registrant filed May 12, 2016. (Incorporated by reference to Exhibit 3.1 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
3.2		Articles of Amendment to Registrant’s Articles of Incorporation filed May 31, 2016. (Incorporated by reference to Exhibit 3.2 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
3.3		Articles of Amendment to Articles of Incorporation filed May 17, 2017. (Incorporated by reference to Exhibit 3.3 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
3.4		By-laws of Registrant. (Incorporated by reference to Exhibit 3.1 to Registrant's Current Report on Form 8-K filed on May 2, 2022)
4.1		Description of Securities. (Incorporated by reference to Exhibit 4.1 to Registrant's Form 10-K filed on March 17, 2023)
10.1*		2019 Equity Incentive Plan.(Incorporated by reference to Exhibit 10.1 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
10.2*		Form of Employee Incentive Stock Option Award Agreement. (Incorporated by reference to Exhibit 10.2 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
10.3(a)*		Form of Warrant to Purchase Common Stock. $4.00 (Incorporated by reference to Exhibit 10.3(a) to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
10.3(b)*		Form of Warrant to Purchase Common Stock. $12.00 (Incorporated by reference to Exhibit 10.3(b) to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
10.4*		Schedule of Warrants to Purchase Common Stock issued on April 1, 2020. (Incorporated by reference to Exhibit 10.4 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
10.5*		Consulting Agreement dated August 1, 2016 between Registrant and Bayshore Corporate Finance, LLC. (Incorporated by reference to Exhibit 10.5 to Amendment No. 1 to Registrant's Registration Statement on Form 10 filed on March 2, 2021)

10.6		Lease Agreement dated March 1, 2018 between Registrant and Marlenko Acquisitions, LLC. (Incorporated by reference to Exhibit 10.6 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
10.7*		Schedule of Employee Incentive Stock Options issued on March 1, 2020. (Incorporated by reference to Exhibit 10.7 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
10.8		Loan Agreement dated February 3, 2021 among Standard Premium Finance Management Corporation and First Horizon Bank. (Incorporated by reference to Exhibit 10.9 to Amendment No. 1 to Registrant's Registration Statement on Form 10 filed on March 2, 2021)
10.9		First Amendment to Loan Agreement dated October 5, 2021 among Standard Premium Finance Management Corporation and First Horizon Bank. (Incorporated by reference to Exhibit 10.9 to Registrant’s Form 10-K filed on March 17, 2023)
10.10		Second Amendment to Loan Agreement dated November 30, 2022 among Standard Premium Finance Management Corporation and First Horizon Bank. (Incorporated by reference to Exhibit 10.10 to Registrant’s Form 10-K filed on March 17, 2023)
10.11		William Koppelmann Employment Contract. (Incorporated by reference to Exhibit 10.2 to Registrant’s Form 8-K filed on July 6, 2022)
10.12		Brian Krogol Employment Contract. (Incorporated by reference to Exhibit 10.3 to Registrant’s Form 8-K filed on July 6, 2022)
10.13*		William Koppelmann Employment Contract. (Incorporated by reference to Exhibit 10.2 to Registrant’s Form 8-K filed on July 6, 2022)
10.14*		Brian Krogol Employment Contract. (Incorporated by reference to Exhibit 10.3 to Registrant’s Form 8-K filed on July 6, 2022)

10.15		Procedures and Guidelines Governing Securities Transactions by Company Personnel. (Incorporated by reference to Exhibit 10.15 to Registrant’s Annual Report on Form 10-K filed on March 15, 2024)

14.1		Code of Ethics. (Incorporated by reference to Exhibit 14.1 to Registrant’s Annual Report on Form 10-K filed on March 31, 2021)

21.1		Subsidiaries of the Registrant. (Incorporated by reference to Exhibit 21.1 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)

31.1		Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer.
31.2		Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer.
32.1		Section 1350 Certifications of Principal Executive Officer and Principal Financial Officer.
101.INS		Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104		Cover page formatted as Inline XBRL and contained in Exhibit 101

______________________________________

* Indicates a management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements 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.


Date: May 13, 2024

STANDARD PREMIUM FINANCE HOLDINGS, INC.

By:			/s/ William Koppelmann
			William Koppelmann
			Chairman, President and Chief Executive Officer (Principal Executive Officer)

By:			/s/ Brian Krogol
			Brian Krogol
			Chief Financial Officer (Principal Financial Officer)

EXHIBIT 31.1

CERTIFICATIONS

I, William Koppelmann, certify that:

I have reviewed this quarterly report on Form 10-Q of Standard Premium Finance Holdings, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 13, 2024



By:		/s/ William Koppelmann
		William Koppelmann
		Principal Executive Officer

EXHIBIT 31.2

CERTIFICATIONS

I, Brian Krogol, certify that:

I have reviewed this quarterly report on Form 10-Q of Standard Premium Finance Holdings, Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 13, 2024



By:		/s/ Brian Krogol
		Brian Krogol
		Principal Financial Officer

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, William Koppelmann, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Standard Premium Finance Holdings, Inc. on Form 10-Q for the fiscal quarter ended March 31, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Standard Premium Finance Holdings, Inc.

May 13, 2024



By:		/s/ William Koppelmann
		William Koppelmann
		Principal Executive Officer

I, Brian Krogol, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Standard Premium Finance Holdings, Inc. on Form 10-Q for the fiscal quarter ended March 31, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Standard Premium Finance Holdings, Inc.

May 13, 2024



By:		/s/ Brian Krogol
		Brian Krogol
		Principal Financial Officer

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 13, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	000-56243
Entity Registrant Name	STANDARD PREMIUM FINANCE HOLDINGS, INC.
Entity Central Index Key	0001807893
Entity Tax Identification Number	81-2624094
Entity Incorporation, State or Country Code	FL
Entity Address, Address Line One	13590 SW 134th Avenue
Entity Address, Address Line Two	Suite 214
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33186
City Area Code	305
Local Phone Number	232-2752
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,905,016

Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Dec. 31, 2023
CURRENT ASSETS
Cash	$ 1,144	$ 45,239
Premium finance contracts and related receivable, net of allowance for credit losses of $1,599,435 and $1,501,593 at March 31, 2024 and December 31, 2023, respectively	65,229,278	60,739,699
Prepaid expenses and other current assets	722,501	307,206
TOTAL CURRENT ASSETS	65,952,923	61,092,144
Property and equipment, net	141,201	122,500
Operating lease assets	286,196	80,840
Finance lease assets	35,350	38,664
OTHER ASSETS
Cash surrender value of life insurance	658,414	650,237
Deferred tax asset	412,000	391,000
TOTAL OTHER ASSETS	1,070,414	1,041,237
TOTAL ASSETS	67,486,084	62,375,385
CURRENT LIABILITIES
Cash overdraft	175,448	168,543
Line of credit, net	44,737,234	42,374,715
Drafts payable	4,015,933	2,681,359
Note payable - current portion	2,939,400	2,181,400
Note payable - stockholders and related parties - current portion	355,000	310,000
Payroll Protection Program loan - current portion	108,435	92,785
Operating lease obligation - current portion	117,997	50,594
Finance lease obligation - current portion	13,340	13,166
Accrued expenses and other current liabilities	1,795,811	1,555,044
TOTAL CURRENT LIABILITIES	54,258,598	49,427,606
LONG-TERM LIABILITIES
Note payable, net of current portion	4,402,855	4,684,157
Note payable - stockholders and related parties, net of current portion	2,131,000	1,778,000
Payroll Protection Program loan, net of current portion	7,794	31,139
Operating lease obligation, net of current portion	168,199	30,246
Finance lease obligation, net of current portion	23,992	27,393
TOTAL LONG-TERM LIABILITIES	6,733,840	6,550,935
TOTAL LIABILITIES	60,992,438	55,978,541
COMMITMENTS AND CONTINGENCIES (see Note 13)
STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.001 per share; 20 million shares authorized, 600,000 shares designated as Series A - convertible, 166,000 issued and outstanding at March 31, 2024 and December 31, 2023	166	166
Common stock, par value $0.001 per share; 100 million shares authorized, 2,905,016 shares issued and outstanding at March 31, 2024 and December 31, 2023	2,905	2,905
Additional paid in capital	3,418,901	3,411,851
Retained earnings	3,071,674	2,981,922
TOTAL STOCKHOLDERS' EQUITY	6,493,646	6,396,844
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 67,486,084	$ 62,375,385

Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Net of allowance for credit losses	$ 1,599,435	$ 1,501,593
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	2,905,016	2,905,016
Common stock, shares outstanding	2,905,016	2,905,016
Series A Convertible Preferred Stock [Member]
Preferred stock, designated shares	600,000	600,000
Preferred stock, shares issued	166,000	166,000
Preferred stock, shares outstanding	166,000	166,000

Consolidated Statements of Operations (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
REVENUES
TOTAL REVENUES	$ 2,829,953	$ 2,078,804
OPERATING COSTS AND EXPENSES
Interest	1,083,160	791,647
Salaries and wages	529,648	429,250
Commissions	386,543	242,435
Provision for credit losses	225,113	191,853
Professional fees	102,233	87,820
Postage	30,057	27,878
Insurance	47,759	27,474
Other operating expenses	260,846	200,699
TOTAL COSTS AND EXPENSES	2,665,359	1,999,056
INCOME BEFORE INCOME TAXES	164,594	79,748
PROVISION FOR INCOME TAXES	45,792	10,868
NET INCOME	118,802	68,880
PREFERRED SHARE DIVIDENDS	(29,050)	(29,050)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 89,752	$ 39,830
Net income per share attributable to common stockholders
Basic	$ 0.03	$ 0.01
Diluted	$ 0.03	$ 0.01
Weighted average common shares outstanding
Basic	2,905,016	2,905,016
Diluted	3,051,788	3,357,414
Finance Charges [Member]
REVENUES
TOTAL REVENUES	$ 2,451,201	$ 1,737,944
Late Charges [Member]
REVENUES
TOTAL REVENUES	277,370	247,229
Origination Fees [Member]
REVENUES
TOTAL REVENUES	$ 101,382	$ 93,631

Consolidated Statements of Changes in Stockholders' Equity (unaudited) - USD ($)	Series A Convertible Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2022	$ 166	$ 2,905	$ 3,383,651	$ 2,565,720	$ 5,952,442
Beginning balance, shares at Dec. 31, 2022	166,000	2,905,016
Options issued for services			7,050		7,050
Dividends paid on preferred stock				(29,050)	(29,050)
Net income				68,880	68,880
Ending balance, value at Mar. 31, 2023	$ 166	$ 2,905	3,390,701	2,605,550	5,999,322
Ending balance, shares at Mar. 31, 2023	166,000	2,905,016
Beginning balance, value at Dec. 31, 2023	$ 166	$ 2,905	3,411,851	2,981,922	6,396,844
Beginning balance, shares at Dec. 31, 2023	166,000	2,905,016
Options issued for services			7,050		7,050
Dividends paid on preferred stock				(29,050)	(29,050)
Net income				118,802	118,802
Ending balance, value at Mar. 31, 2024	$ 166	$ 2,905	$ 3,418,901	$ 3,071,674	$ 6,493,646
Ending balance, shares at Mar. 31, 2024	166,000	2,905,016

Consolidated Statements of Cash Flows (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CASH FLOW FROM OPERATING ACTIVITIES:
NET INCOME	$ 118,802	$ 68,880
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation	7,967	6,257
Amortization of right to use asset - operating lease	29,979	28,285
Amortization of finance lease asset	3,314	3,314
Provision for credit losses	225,113	191,853
Amortization of loan origination fees	394	28,519
Options issued for services	7,050	7,050
Changes in operating assets and liabilities:
Decrease in prepaid expenses and other current assets	(415,295)	(1,008)
(Increase)/Decrease in deferred tax asset, net	(21,000)	(15,836)
Increase/(Decrease) in drafts payable	1,334,574	509,384
Increase/(Decrease) in accrued expenses and other current liabilities	240,767	136,446
Decrease in operating lease liability	(29,979)	(28,285)
Net cash provided by operating activities	1,501,686	934,859
CASH FLOWS FROM INVESTING ACTIVITIES:
Disbursements under premium finance contracts receivable, net	(4,714,692)	(2,734,693)
Payments made on cash surrender value of life insurance	(8,177)	(7,651)
Purchases of property and equipment	(26,668)
Net cash used in investing activities	(4,749,537)	(2,742,344)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft	6,905	0
Proceeds of line of credit, net of repayments	2,362,125	1,915,761
Proceeds from notes payable	518,698	25,000
Repayment of notes payable	(42,000)	(242,000)
Proceeds from notes payable - stockholders and related parties	398,000	30,000
Repayment of notes payable - stockholders and related parties	0	(27,000)
Repayment of finance lease obligation	(3,227)	(3,062)
Repayment of PPP loan	(7,695)	(22,883)
Dividends paid on Series A Convertible Preferred Stock	(29,050)	(29,050)
Net cash provided by financing activities	3,203,756	1,646,766
NET CHANGE IN CASH	(44,095)	(160,719)
CASH AT THE BEGINNING OF THE PERIOD	45,239	421,211
CASH AT THE END OF THE PERIOD	1,144	260,492
Cash paid during the year for:
Income taxes	0	0
Interest paid	1,065,259	779,684
NON-CASH INVESTING AND FINANCING TRANSACTION:
Operating lease assets obtained in exchange for lease liabilities	$ 235,335	$ 0

Pay vs Performance Disclosure - USD ($)	3 Months Ended
Pay vs Performance Disclosure - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss) Attributable to Parent	$ 118,802	$ 68,880

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Principles of Consolidation and Description of Business

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Principles of Consolidation and Description of Business

1. Principles of Consolidation and Description of Business

Standard Premium Finance Holdings, Inc. (“SPFH” or the “Holding”) was incorporated on May 12, 2016, pursuant to the laws of the State of Florida.

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

Cash and Cash Equivalents and Cash Overdraft

Revenue Recognition

Premium Finance Contracts and Related Receivable

Allowance for Credit Losses

Amortization of Line of Credit Costs

Amortization of line of credit costs is computed using the straight-line method over the life of the loan.

Use of Estimates

Concentration of Credit and Financial Instrument Risk


	March 31, 2024 (unaudited)			December 31, 2023
Uninsured balance	$	94,839		$	250,200
Plus: Insured balances		250,000			250,000
Plus: Balances at institutions that do not exceed FDIC limit		1,144			45,239
Plus: Cash overdraft		175,448			168,543
Less: Outstanding checks		(520,287	)		(668,743	)

Cash per Consolidated Balance Sheet	$	1,144		$	45,239

Cash Surrender Value of Life Insurance

Property and Equipment

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:

Furniture and equipment 5 - 7 years

Computer equipment and software 3 - 5 years

Leasehold improvements 10 years

Fair Value of Financial Instruments

Income Taxes

Stock-Based Compensation

Earnings per Common Share


	March 31, 2024 (unaudited)		March 31, 2023 (unaudited)
Options included in the calculation of diluted EPS		187,400		187,400
Vested but antidilutive options		10,000		—
Nonvested options		10,000		20,000
Total options outstanding		207,400		207,400

Warrants included in the calculation of diluted EPS		—		635,000
Vested but antidilutive warrants		1,035,000		400,000
Total warrants outstanding		1,035,000		1,035,000

Leases

Recent Accounting Pronouncements

Premium Finance Contracts, Related Receivable and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2024

Premium Finance Contracts Related Receivable And Allowance For Credit Losses

Premium Finance Contracts, Related Receivable and Allowance for Credit Losses

3. Premium Finance Contracts, Related Receivable and Allowance for Credit Losses

At March 31, 2024 and December 31, 2023, premium finance contract and agents’ receivable consists of the following:


Description	March 31, 2024			December 31, 2023
Insurance premium finance contracts outstanding	$	63,752,872		$	57,769,501
Insurance premium finance contracts cancelled		4,668,758			5,832,574
		68,421,630			63,602,075
Amounts due from agents		872,586			804,131
Less: Unearned interest		(2,465,503	)		(2,164,914	)
		66,828,713			62,241,292
Less: Allowance for credit losses		(1,599,435	)		(1,501,593	)

Total	$	65,229,278		$	60,739,699

The allowance for credit losses at March 31, 2024 and December 31, 2023 are as follows:

Schedule of allowance for credit losses
	March 31, 2024		December 31, 2023
Allowance for premium finance contracts	$	1,433,999	$	1,336,157
Allowance for amounts due from agents		165,436		165,436

Total allowance for credit losses	$	1,599,435	$	1,501,593

Activity in the allowance for credit losses for the three months ended March 31, 2024 and the year ended December 31, 2023 are as follows:


	March 31, 2024			December 31, 2023
Balance at the beginning of the year	$	1,501,593		$	1,129,498
Current year provision		424,000			1,669,000
Direct write-downs charged against the allowance		(375,586	)		(1,639,416	)
Recoveries of amounts previously charged off		49,428			342,511

Balance at end of the year	$	1,599,435		$	1,501,593

Schedule of provision for credit losses
	For the three months ended March 31,
	2024 (unaudited)			2023 (unaudited)
Current additions to the allowance	$	424,000		$	366,000
Less: Contra-revenues		(198,887	)		(174,147	)
Provision for credit losses	$	225,113		$	191,853

The aging analyses of contract receivables as of March 31, 2024 and December 31, 2023 are as

follows:


							Greater
As of March 31, 2024	30–59 Days		60–89 Days		90-119 Days		Than 120 Days		Total Past-Due		Current		Grand Total
Premium finance contracts:
Outstanding	$	62,648	$	8,705	$	4,971	$	6,582	$	82,906	$	63,669,966	$	63,752,872
Cancelled		723,332		602,893		347,765		2,221,425		3,895,415		773,343		4,668,758
Total	$	785,980	$	611,598	$	352,736	$	2,228,007	$	3,978,321	$	64,443,309	$	68,421,630

							Greater
As of December 31, 2023	30–59 Days		60–89 Days		90-119 Days		Than 120 Days		Total Past-Due		Current		Grand Total
Premium finance contracts:
Outstanding	$	147,915	$	2,241	$	7,536	$	30,086	$	187,778	$	57,581,723	$	57,769,501
Cancelled		1,041,232		976,535		456,897		1,913,339		4,388,003		1,444,571		5,832,574
Total	$	1,189,147	$	978,776	$	464,433	$	1,943,425	$	4,575,781	$	59,026,294	$	63,602,075

Property and Equipment, Net

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

4. Property and Equipment, Net

The Company’s property and equipment consists of the following:

Schedule of property and equipment
	March 31, 2024
	(unaudited)			December 31, 2023

Computer Software	$	26,207		$	26,207
Automobile		180,815			155,881
Furniture & Fixtures		14,273			14,273
Leasehold Improvements		116,811			116,811
Computer Equipment		74,879			73,145
Property and equipment, gross		412,985			386,317
Accumulated depreciation		(271,784	)		(263,817	)
Property and equipment, net	$	141,201		$	122,500

The Company recorded depreciation expense in other operating expenses of $7,967 and $6,257, respectively for the three months ended March 31, 2024 and 2023.

Leases

3 Months Ended

Mar. 31, 2024

Leases

Leases

5. Leases

Schedule of leases
		March 31, 2024
Leases	Classification	(unaudited)		December 31, 2023

Right-of-use assets	Operating lease assets	$	286,196	$	80,840
Server lease	Finance lease assets		35,350		38,664
Total lease assets		$	321,546	$	119,504

Current operating lease liability	Current operating lease liabilities	$	117,997	$	50,594
Non-current operating lease liability	Long-term operating lease liabilities		168,199		30,246
Total operating lease liabilities		$	286,196	$	80,840

Current finance lease liability	Current finance lease liabilities	$	13,340	$	13,166
Non-current finance lease liability	Long-term finance lease liabilities		23,992		27,393
Total finance lease liabilities		$	37,332	$	40,559

Drafts Payable

3 Months Ended

Mar. 31, 2024

Drafts Payable

Drafts Payable

6. Drafts Payable

Line of Credit

3 Months Ended

Mar. 31, 2024

Line Of Credit

Line of Credit

7. Line of Credit

Relationship with First Horizon Bank (“FHB”)

PPP Loan

3 Months Ended

Mar. 31, 2024

Ppp Loan

PPP Loan

8. PPP Loan

Schedule of balance of the PPP loan
	March 31, 2024 (unaudited)			December 31, 2023
Total PPP loan	$	116,229		$	123,924
Less current maturities		(108,435	)		(92,785	)
Long-term portion of PPP loan	$	7,794		$	31,139

Notes Payable

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Notes Payable

9. Notes Payable

At March 31, 2024 and December 31, 2023, the balances of long-term unsecured notes to unrelated parties are as follows:


	March 31, 2024
	(unaudited)			December 31, 2023
Total notes payable - Others	$	7,342,255		$	6,865,557
Less current maturities		(2,939,400	)		(2,181,400	)

Long-term maturities	$	4,402,855		$	4,684,157

Notes Payable – Stockholders and Related Parties

3 Months Ended

Mar. 31, 2024

Notes Payable Stockholders And Related Parties

Notes Payable – Stockholders and Related Parties

10. Notes Payable – Stockholders and Related Parties

At March 31, 2024 and December 31, 2023, the balances of long-term notes payable to stockholders and related parties are as follows:


	March 31, 2024
	(unaudited)			December 31, 2023
Total notes payable - Related parties	$	2,486,000		$	2,088,000
Less current maturities		(355,000	)		(310,000	)

Long-term maturities	$	2,131,000		$	1,778,000

Equity

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Equity

11. Equity

Preferred Stock

Common Stock

Stock Options

The following table summarizes information about employee stock options outstanding at March 31, 2024:

	Schedule of employee stock options
		Outstanding Options				Vested Options
	Exercise Price	Number Outstanding at March 31, 2024	Weighted Average Remaining Term		Weighted Average Exercise Price	Number Exercisable at March 31, 2024	Weighted Average Remaining Term		Weighted Average Exercise Price
$	0.80	187,400	5.92	$	0.80	187,400	5.92	$	0.80
$	4.50	10,000	8.25	$	4.50	5,000	8.25		4.50
$	4.95	10,000	3.24	$	4.95	5,000	3.24		4.95
	Outstanding options	207,400	5.90 years	$	1.18	197,400	5.90 years	$	1.00

A summary of information regarding the stock options outstanding is as follows:

Schedule of stock options outstanding
		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
	Outstanding at December 31, 2023		207,400	$	1.18		6.15 years	$	705,224
	Issued		—		—		—		—
	Exercised		—		—		—		—
	Outstanding at March 31, 2024		207,400	$	1.18		5.90 years	$	462,878
	Exercisable at March 31, 2024		197,400	$	1.00		5.90 years	$	462,878

During each of the three months ended March 31, 2024 and 2023, the Company recognized $7,050 of stock option expense.

Stock Warrants

A summary of information regarding the stock warrants outstanding is as follows:

Schedule of stock warrants
		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
	Outstanding at December 31, 2023		1,035,000	$	7.09		1.6 years	$	355,600
	Issued		—		—		—		—
	Exercised		—		—		—		—
	Outstanding at March 31, 2024		1,035,000	$	7.09		1.33 years		—
	Exercisable at March 31, 2024		1,035,000	$	7.09		1.33 years		—

The warrants vested immediately. During each of the three months ended March 31, 2024 and 2023, the Company recognized no stock warrant expense.

Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions

12. Related Party Transactions

Office lease

Line of credit

Notes payable

As discussed in Note 10, the Company has been advanced funds by its shareholders. As of March 31, 2024 and December 31, 2023, the amounts advanced were $2,131,000 and $1,778,000, respectively.

Stock options

Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

Subsequent Events

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Cash and Cash Equivalents and Cash Overdraft

Cash and Cash Equivalents and Cash Overdraft

Revenue Recognition

Revenue Recognition

Premium Finance Contracts and Related Receivable

Premium Finance Contracts and Related Receivable

Allowance for Credit Losses

Allowance for Credit Losses

Amortization of Line of Credit Costs

Amortization of Line of Credit Costs

Amortization of line of credit costs is computed using the straight-line method over the life of the loan.

Use of Estimates

Use of Estimates

Concentration of Credit and Financial Instrument Risk

Concentration of Credit and Financial Instrument Risk


	March 31, 2024 (unaudited)			December 31, 2023
Uninsured balance	$	94,839		$	250,200
Plus: Insured balances		250,000			250,000
Plus: Balances at institutions that do not exceed FDIC limit		1,144			45,239
Plus: Cash overdraft		175,448			168,543
Less: Outstanding checks		(520,287	)		(668,743	)

Cash per Consolidated Balance Sheet	$	1,144		$	45,239

Cash Surrender Value of Life Insurance

Cash Surrender Value of Life Insurance

Property and Equipment

Property and Equipment

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:

Furniture and equipment 5 - 7 years

Computer equipment and software 3 - 5 years

Leasehold improvements 10 years

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Income Taxes

Income Taxes

Stock-Based Compensation

Stock-Based Compensation

Earnings per Common Share

Earnings per Common Share


	March 31, 2024 (unaudited)		March 31, 2023 (unaudited)
Options included in the calculation of diluted EPS		187,400		187,400
Vested but antidilutive options		10,000		—
Nonvested options		10,000		20,000
Total options outstanding		207,400		207,400

Warrants included in the calculation of diluted EPS		—		635,000
Vested but antidilutive warrants		1,035,000		400,000
Total warrants outstanding		1,035,000		1,035,000

Leases

Leases

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Schedule of reconciliation between uninsured balances and cash per the consolidated balance sheet


	March 31, 2024 (unaudited)			December 31, 2023
Uninsured balance	$	94,839		$	250,200
Plus: Insured balances		250,000			250,000
Plus: Balances at institutions that do not exceed FDIC limit		1,144			45,239
Plus: Cash overdraft		175,448			168,543
Less: Outstanding checks		(520,287	)		(668,743	)

Cash per Consolidated Balance Sheet	$	1,144		$	45,239

Schedule of effects of the outstanding options and warrants on earnings per share


	March 31, 2024 (unaudited)		March 31, 2023 (unaudited)
Options included in the calculation of diluted EPS		187,400		187,400
Vested but antidilutive options		10,000		—
Nonvested options		10,000		20,000
Total options outstanding		207,400		207,400

Warrants included in the calculation of diluted EPS		—		635,000
Vested but antidilutive warrants		1,035,000		400,000
Total warrants outstanding		1,035,000		1,035,000

Premium Finance Contracts, Related Receivable and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2024

Premium Finance Contracts Related Receivable And Allowance For Credit Losses

Schedule of premium finance contract and agents receivable


Description	March 31, 2024			December 31, 2023
Insurance premium finance contracts outstanding	$	63,752,872		$	57,769,501
Insurance premium finance contracts cancelled		4,668,758			5,832,574
		68,421,630			63,602,075
Amounts due from agents		872,586			804,131
Less: Unearned interest		(2,465,503	)		(2,164,914	)
		66,828,713			62,241,292
Less: Allowance for credit losses		(1,599,435	)		(1,501,593	)

Total	$	65,229,278		$	60,739,699

Schedule of allowance for credit losses

Schedule of allowance for credit losses
	March 31, 2024		December 31, 2023
Allowance for premium finance contracts	$	1,433,999	$	1,336,157
Allowance for amounts due from agents		165,436		165,436

Total allowance for credit losses	$	1,599,435	$	1,501,593

Schedule of activity in the allowance for credit losses


	March 31, 2024			December 31, 2023
Balance at the beginning of the year	$	1,501,593		$	1,129,498
Current year provision		424,000			1,669,000
Direct write-downs charged against the allowance		(375,586	)		(1,639,416	)
Recoveries of amounts previously charged off		49,428			342,511

Balance at end of the year	$	1,599,435		$	1,501,593

Schedule of provision for credit losses

Schedule of provision for credit losses
	For the three months ended March 31,
	2024 (unaudited)			2023 (unaudited)
Current additions to the allowance	$	424,000		$	366,000
Less: Contra-revenues		(198,887	)		(174,147	)
Provision for credit losses	$	225,113		$	191,853

Schedule of aging analyses of contract receivables


							Greater
As of March 31, 2024	30–59 Days		60–89 Days		90-119 Days		Than 120 Days		Total Past-Due		Current		Grand Total
Premium finance contracts:
Outstanding	$	62,648	$	8,705	$	4,971	$	6,582	$	82,906	$	63,669,966	$	63,752,872
Cancelled		723,332		602,893		347,765		2,221,425		3,895,415		773,343		4,668,758
Total	$	785,980	$	611,598	$	352,736	$	2,228,007	$	3,978,321	$	64,443,309	$	68,421,630

							Greater
As of December 31, 2023	30–59 Days		60–89 Days		90-119 Days		Than 120 Days		Total Past-Due		Current		Grand Total
Premium finance contracts:
Outstanding	$	147,915	$	2,241	$	7,536	$	30,086	$	187,778	$	57,581,723	$	57,769,501
Cancelled		1,041,232		976,535		456,897		1,913,339		4,388,003		1,444,571		5,832,574
Total	$	1,189,147	$	978,776	$	464,433	$	1,943,425	$	4,575,781	$	59,026,294	$	63,602,075

Property and Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Schedule of property and equipment
	March 31, 2024
	(unaudited)			December 31, 2023

Computer Software	$	26,207		$	26,207
Automobile		180,815			155,881
Furniture & Fixtures		14,273			14,273
Leasehold Improvements		116,811			116,811
Computer Equipment		74,879			73,145
Property and equipment, gross		412,985			386,317
Accumulated depreciation		(271,784	)		(263,817	)
Property and equipment, net	$	141,201		$	122,500

Leases (Tables)

3 Months Ended

Mar. 31, 2024

Leases

Schedule of leases

Schedule of leases
		March 31, 2024
Leases	Classification	(unaudited)		December 31, 2023

Right-of-use assets	Operating lease assets	$	286,196	$	80,840
Server lease	Finance lease assets		35,350		38,664
Total lease assets		$	321,546	$	119,504

Current operating lease liability	Current operating lease liabilities	$	117,997	$	50,594
Non-current operating lease liability	Long-term operating lease liabilities		168,199		30,246
Total operating lease liabilities		$	286,196	$	80,840

Current finance lease liability	Current finance lease liabilities	$	13,340	$	13,166
Non-current finance lease liability	Long-term finance lease liabilities		23,992		27,393
Total finance lease liabilities		$	37,332	$	40,559

PPP Loan (Tables)

3 Months Ended

Mar. 31, 2024

Ppp Loan

Schedule of balance of the PPP loan

Schedule of balance of the PPP loan
	March 31, 2024 (unaudited)			December 31, 2023
Total PPP loan	$	116,229		$	123,924
Less current maturities		(108,435	)		(92,785	)
Long-term portion of PPP loan	$	7,794		$	31,139

Notes Payable (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Schedule of long-term unsecured notes to unrelated parties


	March 31, 2024
	(unaudited)			December 31, 2023
Total notes payable - Others	$	7,342,255		$	6,865,557
Less current maturities		(2,939,400	)		(2,181,400	)

Long-term maturities	$	4,402,855		$	4,684,157

Notes Payable – Stockholders and Related Parties (Tables)

3 Months Ended

Mar. 31, 2024

Notes Payable Stockholders And Related Parties

Schedule of long-term notes payable to stockholders and related parties


	March 31, 2024
	(unaudited)			December 31, 2023
Total notes payable - Related parties	$	2,486,000		$	2,088,000
Less current maturities		(355,000	)		(310,000	)

Long-term maturities	$	2,131,000		$	1,778,000

Equity (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Schedule of employee stock options

	Schedule of employee stock options
		Outstanding Options				Vested Options
	Exercise Price	Number Outstanding at March 31, 2024	Weighted Average Remaining Term		Weighted Average Exercise Price	Number Exercisable at March 31, 2024	Weighted Average Remaining Term		Weighted Average Exercise Price
$	0.80	187,400	5.92	$	0.80	187,400	5.92	$	0.80
$	4.50	10,000	8.25	$	4.50	5,000	8.25		4.50
$	4.95	10,000	3.24	$	4.95	5,000	3.24		4.95
	Outstanding options	207,400	5.90 years	$	1.18	197,400	5.90 years	$	1.00

Schedule of stock options outstanding

Schedule of stock options outstanding
		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
	Outstanding at December 31, 2023		207,400	$	1.18		6.15 years	$	705,224
	Issued		—		—		—		—
	Exercised		—		—		—		—
	Outstanding at March 31, 2024		207,400	$	1.18		5.90 years	$	462,878
	Exercisable at March 31, 2024		197,400	$	1.00		5.90 years	$	462,878

Schedule of stock warrants

Schedule of stock warrants
		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
	Outstanding at December 31, 2023		1,035,000	$	7.09		1.6 years	$	355,600
	Issued		—		—		—		—
	Exercised		—		—		—		—
	Outstanding at March 31, 2024		1,035,000	$	7.09		1.33 years		—
	Exercisable at March 31, 2024		1,035,000	$	7.09		1.33 years		—

Summary of Significant Accounting Policies (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Uninsured balance	$ 94,839	$ 250,200
Plus: Insured balances	250,000	250,000
Plus: Balances at institutions that do not exceed FDIC limit	1,144	45,239
Plus: Cash overdraft	175,448	168,543
Less: Outstanding checks	(520,287)	(668,743)
Cash per Consolidated Balance Sheet	$ 1,144	$ 45,239

Summary of Significant Accounting Policies (Details 1) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Options Included In The Calculation Of Diluted EPS [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	187,400	187,400
Vested But Antidilutive Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	10,000	0
Non Vested Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	10,000	20,000
Options Held [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	207,400	207,400
Warrants Included In The Calculation Of Dluted EPS [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	0	635,000
Vested But Antidilutive Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	1,035,000	400,000
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	1,035,000	1,035,000

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Product Information [Line Items]
Cash equivalents	$ 0		$ 0
Cash overdraft	175,448		168,543
Premium finance contracts gross	68,421,630		63,602,075
Unearned premium	$ 93,843,332		87,618,261
Interest rate	17.20%	16.50%
FDIC insured amount	$ 250,000
Uninsured balances	94,839		250,200
Cash surrender life insurance	658,414		650,237
Loan against the life insurance policy	$ 641,934
Loan accrued interest rate	6.64%
Accrued interest or penalties	$ 0		$ 0
Number of share outstanding	207,400		207,400
Warrants outstanding	1,035,000		1,035,000
March 1, 2021 [Member]
Product Information [Line Items]
Option vested	93,700
March 1, 2022 [Member]
Product Information [Line Items]
Option vested	93,700
June 29, 2023 [Member]
Product Information [Line Items]
Option vested	10,000
June 29, 2024 [Member]
Product Information [Line Items]
Option vested	10,000
Leasehold Improvements [Member]
Product Information [Line Items]
Property and equipment estimated useful lives	10 years
Minimum [Member] \| Furniture and Fixtures [Member]
Product Information [Line Items]
Property and equipment estimated useful lives	5 years
Minimum [Member] \| Computer Equipment [Member]
Product Information [Line Items]
Property and equipment estimated useful lives	3 years
Maximum [Member] \| Furniture and Fixtures [Member]
Product Information [Line Items]
Property and equipment estimated useful lives	7 years
Maximum [Member] \| Computer Equipment [Member]
Product Information [Line Items]
Property and equipment estimated useful lives	5 years
FLORIDA \| Customer Concentration Risk [Member] \| Accounts Receivable [Member]
Product Information [Line Items]
Concentration risk percentage	62.00%	59.00%
GEORGIA \| Customer Concentration Risk [Member] \| Accounts Receivable [Member]
Product Information [Line Items]
Concentration risk percentage	10.00%	12.00%
NORTH CAROLINA \| Customer Concentration Risk [Member] \| Accounts Receivable [Member]
Product Information [Line Items]
Concentration risk percentage	9.00%	12.00%
SOUTH CAROLINA \| Customer Concentration Risk [Member] \| Accounts Receivable [Member]
Product Information [Line Items]
Concentration risk percentage	11.00%	10.00%

Premium Finance Contracts, Related Receivable and Allowance for Credit Losses (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Premium Finance Contracts Related Receivable And Allowance For Credit Losses
Insurance premium finance contracts outstanding	$ 63,752,872	$ 57,769,501
Insurance premium finance contracts cancelled	4,668,758	5,832,574
Insurance premium finance contracts gross	68,421,630	63,602,075
Amounts due from agents	872,586	804,131
Less: Unearned interest	(2,465,503)	(2,164,914)
Insurance premium finance contracts net	66,828,713	62,241,292
Less: Allowance for credit losses	(1,599,435)	(1,501,593)
Total	$ 65,229,278	$ 60,739,699

Premium Finance Contracts, Related Receivable and Allowance for Credit Losses (Details 1) - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Premium Finance Contracts Related Receivable And Allowance For Credit Losses
Allowance for premium finance contracts	$ 1,433,999	$ 1,336,157
Allowance for amounts due from agents	165,436	165,436
Total allowance for credit losses	$ 1,599,435	$ 1,501,593	$ 1,129,498

Premium Finance Contracts, Related Receivable and Allowance for Credit Losses (Details 2) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Premium Finance Contracts Related Receivable And Allowance For Credit Losses
Balance, at the beginning of the year	$ 1,501,593	$ 1,129,498
Current year provision	424,000	1,669,000
Direct write-downs charged against the allowance	(375,586)	(1,639,416)
Recoveries of amounts previously charged off	49,428	342,511
Balance at end of the year	$ 1,599,435	$ 1,501,593

Premium Finance Contracts, Related Receivable and Allowance for Credit Losses (Details 3) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Premium Finance Contracts Related Receivable And Allowance For Credit Losses
Current additions to the allowance	$ 424,000	$ 366,000
Less: Contra-revenues	(198,887)	(174,147)
Provision for credit losses	$ 225,113	$ 191,853

Premium Finance Contracts, Related Receivable and Allowance for Credit Losses (Details 4) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Financing Receivable, Past Due [Line Items]
Outstanding	$ 63,752,872	$ 57,769,501
Cancelled	4,668,758	5,832,574
Total	68,421,630	63,602,075
Financial Asset, 30 to 59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Outstanding	62,648	147,915
Cancelled	723,332	1,041,232
Total	785,980	1,189,147
Financial Asset, 60 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Outstanding	8,705	2,241
Cancelled	602,893	976,535
Total	611,598	978,776
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Outstanding	4,971	7,536
Cancelled	347,765	456,897
Total	352,736	464,433
Financing Receivables Equal To Greater Than 120 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Outstanding	6,582	30,086
Cancelled	2,221,425	1,913,339
Total	2,228,007	1,943,425
Financial Asset, Past Due [Member]
Financing Receivable, Past Due [Line Items]
Outstanding	82,906	187,778
Cancelled	3,895,415	4,388,003
Total	3,978,321	4,575,781
Financial Asset, Not Past Due [Member]
Financing Receivable, Past Due [Line Items]
Outstanding	63,669,966	57,581,723
Cancelled	773,343	1,444,571
Total	$ 64,443,309	$ 59,026,294

Property and Equipment, Net (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 412,985	$ 386,317
Accumulated depreciation	(271,784)	(263,817)
Property and equipment, net	141,201	122,500
Computer Software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	26,207	26,207
Automobiles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	180,815	155,881
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	14,273	14,273
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	116,811	116,811
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 74,879	$ 73,145

Property and Equipment, Net (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 7,967	$ 6,257

Leases (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Leases
Right-of-use assets	$ 286,196	$ 80,840
Server lease	35,350	38,664
Total lease assets	321,546	119,504
Current operating lease liability	117,997	50,594
Non-current operating lease liability	168,199	30,246
Total operating lease liabilities	286,196	80,840
Current finance lease liability	13,340	13,166
Non-current finance lease liability	23,992	27,393
Total finance lease liabilities	$ 37,332	$ 40,559

Leases (Details Narrative) - USD ($)						3 Months Ended
Leases (Details Narrative) - USD ($)	Mar. 01, 2024	Sep. 30, 2022	Sep. 26, 2022	Dec. 07, 2021	Oct. 14, 2019	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Lessee, Lease, Description [Line Items]
Right to use of asset						$ 286,196		$ 80,840
Lease liability						$ 286,196		$ 80,840
Borrowing rate						5.25%		5.25%
Weighted-average remaining lease term						2 years 7 months 20 days		1 year 11 months 19 days
Total lease cost						$ 34,655	$ 30,056
Secure Facility Lease [Member]
Lessee, Lease, Description [Line Items]
Right to use of asset			$ 48,979			235,335
Lease liability			$ 48,979			$ 235,335
Lease term			3 years
Operating lease payments			$ 1,418
Borrowing rate			4.00%
Office Lease [Member]
Lessee, Lease, Description [Line Items]
Lease term	2 years
Operating lease payments	$ 7,048
Copier Lease [Member]
Lessee, Lease, Description [Line Items]
Right to use of asset					$ 68,799
Lease liability					68,799
Operating lease payments					$ 1,116
Borrowing rate					5.25%
Hardware Lease [Member]
Lessee, Lease, Description [Line Items]
Right to use of asset		$ 22,059
Lease liability		22,059
Operating lease payments		$ 664
Server Lease [Member]
Lessee, Lease, Description [Line Items]
Right to use of asset				$ 66,281
Lease liability				$ 65,801
Lease term				5 years
Operating lease payments				$ 1,249
Borrowing rate				5.25%

Drafts Payable (Details Narrative) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Drafts Payable
Drafts payable	$ 4,015,933	$ 2,681,359

Line of Credit (Details Narrative) - First Horizon Bank [Member] - USD ($)		1 Months Ended	3 Months Ended		12 Months Ended
	Feb. 03, 2021	Oct. 31, 2021	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Loan Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revolving line of credit	$ 35,000,000
Payments of loan costs	180,350
Line of credit costs		$ 25,771	$ 117,228
Advance rate			85.00%		85.00%
Interest rate description			The line of credit is secured by all Company assets and is personally guaranteed by our CEO and two directors of the Company. The line of credit bears interest at 30-Day SOFR plus 2.55-2.96% per annum (8.29% at March 31, 2024 and 8.09% at December 31, 2023). The terms of the Line of Credit agreement provide for a minimum interest of 3.35% when the 30-day SOFR falls below 0.50%.
Long term line of credit			$ 44,739,861		$ 42,377,736
Unamortized loan origination fees			2,627		$ 3,021
Interest expense			911,000	$ 586,000
Amortized loan origination fee			394	$ 28,519
Line of credit facility, maximum borrowing capacity			$ 260,139
Loan Agreement [Member] \| Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revolving line of credit		35,000,000
Loan Agreement [Member] \| Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revolving line of credit		$ 45,000,000
Initial Funding [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revolving line of credit	$ 25,974,695

PPP Loan (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Ppp Loan
Total PPP loan	$ 116,229	$ 123,924
Less current maturities	(108,435)	(92,785)
Long-term portion of PPP loan	$ 7,794	$ 31,139

PPP Loan (Details Narrative) - USD ($)	Apr. 18, 2020	Mar. 31, 2024	Dec. 31, 2023	Jun. 22, 2022	May 18, 2022
Debt Instrument [Line Items]
Interest rate		6.64%
Small Business Administration [Member]
Debt Instrument [Line Items]
Debt instrument face amount	$ 271,000
Debt instrument, term	2 years
Interest rate	1.00%			1.00%
Interest payable		$ 521	$ 107		$ 7,801

Notes Payable (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Debt Disclosure [Abstract]
Total notes payable - Others	$ 7,342,255	$ 6,865,557
Less current maturities	(2,939,400)	(2,181,400)
Long-term maturities	$ 4,402,855	$ 4,684,157

Notes Payable (Details Narrative) - USD ($)	3 Months Ended
Notes Payable (Details Narrative) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Debt Instrument [Line Items]
Interest expense	$ 126,000	$ 128,000
Proceeds on notes	518,698	25,000
Repaid principal on notes	$ 42,000	$ 242,000
Minimum [Member]
Debt Instrument [Line Items]
Interest payable rate	6.00%
Maximum [Member]
Debt Instrument [Line Items]
Interest payable rate	8.00%

Notes Payable - Stockholders and Related Parties (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Notes Payable Stockholders And Related Parties
Total notes payable - Related parties	$ 2,486,000	$ 2,088,000
Less current maturities	(355,000)	(310,000)
Long-term maturities	$ 2,131,000	$ 1,778,000

Notes Payable – Stockholders and Related Parties (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Defined Benefit Plan Disclosure [Line Items]
Interest expense	$ 44,000	$ 39,000
Proceeds from notes payable	398,000	30,000
Repayments of other notes payable	$ 0	$ 27,000
Stockholders And Related Parties [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest rate	8.00%

Equity (Details) - $ / shares	3 Months Ended
Equity (Details) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares outstanding	207,400	207,400
Weighted average contractual life	5 years 10 months 24 days
Weighted average exercise price	$ 1.18	$ 1.18
Exercisable number of shares	197,400
Weighted average contractual life	5 years 10 months 24 days
Exercisable weighted average exercise price	$ 1.00
Exercise Price 0. 80 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares outstanding	187,400
Weighted average contractual life	5 years 11 months 1 day
Weighted average exercise price	$ 0.80
Exercisable number of shares	187,400
Weighted average contractual life	5 years 11 months 1 day
Exercisable weighted average exercise price	$ 0.80
Exercise Price 4. 50 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares outstanding	10,000
Weighted average contractual life	8 years 3 months
Weighted average exercise price	$ 4.50
Exercisable number of shares	5,000
Weighted average contractual life	8 years 3 months
Exercisable weighted average exercise price	$ 4.50
Exercise Price 4. 95 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of shares outstanding	10,000
Weighted average contractual life	3 years 2 months 26 days
Weighted average exercise price	$ 4.95
Exercisable number of shares	5,000
Weighted average contractual life	3 years 2 months 26 days
Exercisable weighted average exercise price	$ 4.95

Equity (Details 1) - USD ($)	3 Months Ended	12 Months Ended
Equity (Details 1) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Equity [Abstract]
Number of share outstanding, Beginning	207,400
Weighted average exercise price outstanding, Beginning	$ 1.18
Weighted average remaining contractual term, Exercisable	5 years 10 months 24 days	6 years 1 month 24 days
Intrinsic value, Beginning	$ 705,224
Number of shares, Issued	0
Weighted average exercise price outstanding, Issued	$ 0
Number of shares, Exercised	0
Weighted average exercise price outstanding, Exercised	$ 0
Number of share outstanding, Ending	207,400	207,400
Weighted average exercise price outstanding, Ending	$ 1.18	$ 1.18
Intrinsic value, Ending	$ 462,878	$ 705,224
Number of shares, Exercisable	197,400
Weighted average exercise price, Exercisable	$ 1.00
Weighted average remaining contractual term	5 years 10 months 24 days
Intrinsic value, Exercisable	$ 462,878

Equity (Details 2) - USD ($)	3 Months Ended	12 Months Ended
Equity (Details 2) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Equity [Abstract]
Number of warrants outstanding, Beginning	1,035,000
Weighted average exercise price, Beginning	$ 7.09
Weighted average remaining contractual term	1 year 3 months 29 days	1 year 7 months 6 days
Intrinsic value, Beginning	$ 355,600
Number of warrants, Issued	0
Weighted average exercise price, Issued	$ 0
Number of warrants, Exercised	0
Weighted average exercise price, Exercised	$ 0
Number of warrants outstanding, Ending	1,035,000	1,035,000
Weighted average exercise price, Ending	$ 7.09	$ 7.09
Intrinsic value, Ending	$ 0	$ 355,600
Number of warrants, Exercisable	1,035,000
Weighted average exercise price, Exercisable	$ 7.09
Weighted average remaining contractual term, exercisable	1 year 3 months 29 days
Intrinsic value, Exercisable	$ 0

Equity (Details Narrative) - USD ($)	3 Months Ended
Equity (Details Narrative) - USD ($)	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Class of Stock [Line Items]
Preferred stock shares authorized	20,000,000		20,000,000
Preferred stock, par value	$ 0.001		$ 0.001
Preferred stock liquidation preference per share	$ 10
Liquidation preference preferred stock	$ 1,689,050
Dividends	29,050	$ 29,050
Dividends payable	$ 29,050		$ 29,050
Common stock, shares authorized	100,000,000		100,000,000
Common stock, par value	$ 0.001		$ 0.001
Common stock, shares issued	2,905,016		2,905,016
Common stock, shares outstanding	2,905,016		2,905,016
Number of shares issued, value	$ 7,050	7,050
Stock warrant expense	$ 0	$ 0
Series A Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, designated shares	600,000		600,000
Preferred stock, shares issued	166,000		166,000
Preferred stock, shares outstanding	166,000		166,000

Related Party Transactions (Details Narrative) - USD ($)			3 Months Ended
	Mar. 01, 2024	Jun. 29, 2022	Mar. 31, 2024	Dec. 31, 2023	Oct. 31, 2021	Feb. 03, 2021
Related Party Transaction [Line Items]
Notes payable advanced			$ 2,131,000	$ 1,778,000
Equity Option [Member] \| Equity Incentive Plan 2019 [Member] \| Officers And Directors [Member]
Related Party Transaction [Line Items]
Stock options issued		20,000
Impact on future earnings description			The total impact on earnings from this transaction is $56,400, which is being amortized over 24 months at a rate of $2,350 per month.
First Horizon Bank [Member] \| Loan Agreement [Member]
Related Party Transaction [Line Items]
Long term line of credit						$ 35,000,000
First Horizon Bank [Member] \| Loan Agreement [Member] \| Minimum [Member]
Related Party Transaction [Line Items]
Long term line of credit					$ 35,000,000
Line of credit increased					35,000,000
First Horizon Bank [Member] \| Loan Agreement [Member] \| Maximum [Member]
Related Party Transaction [Line Items]
Long term line of credit					45,000,000
Line of credit increased					$ 45,000,000
Office Lease [Member]
Related Party Transaction [Line Items]
Operating lease payments	$ 7,048
Office Lease [Member] \| Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Operating lease payments			$ 7,048

Commitments and Contingencies (Details Narrative)	Jun. 29, 2022 shares
Equity Option [Member] \| CEO And CFO [Member] \| Equity Incentive Plan 2019 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock option issued	20,000

Subsequent Events (Details Narrative) - USD ($)	1 Months Ended
Subsequent Events (Details Narrative) - USD ($)	May 31, 2024	Apr. 30, 2024	Mar. 31, 2024	Dec. 31, 2023
Subsequent Event [Line Items]
Notes payable related party			$ 116,229	$ 123,924
Subsequent Event [Member]
Subsequent Event [Line Items]
Notes payable related party		$ 620,000
Notes payable		325,652
Repayment of notes payable	$ 10,000	$ 10,000

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