Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

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 September 30, 2024

or

☐ 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 3,001,216shares of common stock issued and outstanding as of November 14, 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 "Company" and "Standard Premium" as used herein refers collectively to Standard Premium Finance Holdings, Inc. and its wholly owned subsidiaries, unless otherwise stated.

i

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	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
SIGNATURES	33

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements.

STANDARD PREMIUM FINANCE HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
SEPTEMBER 30, 2024

Table of Contents

CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023			3
Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (unaudited)			4
Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023 (unaudited)			5
Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited)			6
Condensed Notes to Consolidated Financial Statements (unaudited)			7 - 22

Standard Premium Finance Holdings, Inc. and Subsidiary

Consolidated Balance Sheets

September 30, 2024 (unaudited) and December 31, 2023

		September 30,			December 31,
		2024			2023
		(unaudited)
ASSETS
CURRENT ASSETS
Cash		$	2,150			$	45,239
Premium finance contracts and related receivable, net of allowance for credit losses of $1,849,130and $1,501,593at September 30, 2024 and December 31, 2023, respectively			67,785,348				60,739,699
Prepaid expenses and other current assets			379,374				307,206
TOTAL CURRENT ASSETS			68,166,872				61,092,144
Property and equipment, net			131,956				122,500
Operating lease assets			231,292				80,840
Finance lease assets			28,722				38,664
OTHER ASSETS
Cash surrender value of life insurance			48,847				650,237
Deferred tax asset			475,000				391,000
TOTAL OTHER ASSETS			523,847				1,041,237
TOTAL ASSETS		$	69,082,689			$	62,375,385
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Cash overdraft		$	473,163			$	168,543
Line of credit, net			43,789,908				42,374,715
Drafts payable			3,652,123				2,681,359
Note payable - current portion			2,870,992				2,181,400
Note payable - stockholders and related parties - current portion			376,000				310,000
Other loans - current portion			79,916				92,785
Operating lease obligation - current portion			121,487				50,594
Finance lease obligation - current portion			13,694				13,166
Accrued expenses and other current liabilities			1,705,566				1,555,044
TOTAL CURRENT LIABILITIES			53,082,849				49,427,606
LONG-TERM LIABILITIES
Note payable, net of current portion			6,033,254				4,684,157
Note payable - stockholders and related parties, net of current portion			2,663,040				1,778,000
Other loans, net of current portion			-				31,139
Operating lease obligation, net of current portion			109,806				30,246
Finance lease obligation, net of current portion			17,055				27,393
TOTAL LONG-TERM LIABILITIES			8,823,155				6,550,935
TOTAL LIABILITIES			61,906,004				55,978,541
COMMITMENTS AND CONTINGENCIES (see Note 13)
STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.001per share; 20million shares authorized, 600,000shares designated as Series A - convertible, 166,000issued and outstanding at September 30, 2024 and December 31, 2023			166				166
Common stock, par value $0.001per share; 100 millionshares authorized, 3,001,216and 2,905,016shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively			3,001				2,905
Additional paid in capital			3,502,815				3,411,851
Retained earnings			3,670,703				2,981,922
TOTAL STOCKHOLDERS' EQUITY			7,176,685				6,396,844
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	69,082,689			$	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 and Nine Months Ended September 30, 2024 and 2023

(unaudited)

		For the Three Months Ended September 30,			For the Nine Months Ended September 30,
		2024			2023			2024			2023
REVENUES
Finance charges		$	2,680,586			$	2,237,445			$	7,849,924			$	5,951,391
Late charges			301,302				267,111				880,063				755,819
Origination fees			91,459				89,803				292,611				274,393
TOTAL REVENUES			3,073,347				2,594,359				9,022,598				6,981,603
OPERATING COSTS AND EXPENSES
Interest			1,153,662				1,027,037				3,352,760				2,724,850
Salaries and wages			527,082				455,764				1,590,218				1,306,839
Commissions			411,114				309,259				1,143,003				822,831
Provision for credit losses			242,651				284,393				771,830				631,174
Professional fees			49,249				71,986				237,598				237,819
Postage			27,077				30,527				87,342				87,217
Insurance			31,334				23,920				129,897				86,971
Other operating expenses			224,352				236,979				703,290				600,981
TOTAL COSTS AND EXPENSES			2,666,521				2,439,865				8,015,938				6,498,682
INCOME BEFORE INCOME TAXES			406,826				154,494				1,006,660				482,921
PROVISION FOR INCOME TAXES			106,199				37,564				259,779				121,070
NET INCOME			300,627				116,930				746,881				361,851
PREFERRED SHARE DIVIDENDS			(29,050	)			(29,050	)			(58,100	)			(87,150	)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	271,577			$	87,880			$	688,781			$	274,701
Net income per share attributable to common stockholders
	$	0.09			$	0.03			$	0.24			$	0.09
Diluted		$	0.07			$	0.03			$	0.19			$	0.08
Weighted average common shares outstanding
		2,959,301				2,905,016				2,923,111				2,905,016
Diluted			4,178,681				3,258,893				4,020,530				3,295,226

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 and Nine Months Ended September 30, 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
Options issued for services			-				-				-				-				7,050				-				7,050
Dividends paid on preferred stock			-				-				-				-				-				(29,050	)			(29,050	)
Net income			-				-				-				-				-				176,041				176,041
BALANCE AT JUNE 30, 2023 (unaudited)			166,000			$	166				2,905,016			$	2,905			$	3,397,751			$	2,752,541			$	6,153,363
Options issued for services			-				-				-				-				7,050				-				7,050
Dividends paid on preferred stock			-				-				-				-				-				(29,050	)			(29,050	)
Net income			-				-				-				-				-				116,930				116,930
BALANCE AT SEPTEMBER 30, 2023 (unaudited)			166,000			$	166				2,905,016			$	2,905			$	3,404,801			$	2,840,421			$	6,248,293

		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
Options issued for services			-				-				-				-				7,050				-				7,050
Net income			-				-				-				-				-				327,452				327,452
BALANCE AT JUNE 30, 2024 (unaudited)			166,000			$	166				2,905,016			$	2,905			$	3,425,951			$	3,399,126			$	6,828,148
Common stock issued in exchange for notes payable			-				-				96,200				96				76,864				-				76,960
Dividends paid on preferred stock			-				-				-				-				-				(29,050	)			(29,050	)
Net income			-				-				-				-				-				300,627				300,627
BALANCE AT SEPTEMBER 30, 2024 (unaudited)			166,000			$	166				3,001,216			$	3,001			$	3,502,815			$	3,670,703			$	7,176,685

See accompanying condensed notes to the consolidated unaudited financial statements.

Standard Premium Finance Holdings, Inc. and Subsidiary

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2024 and 2023

(unaudited)

		For the Nine Months Ended
		September 30,
		2024			2023
CASH FLOW FROM OPERATING ACTIVITIES:
NET INCOME		$	746,881			$	361,851
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation			30,619				19,139
Amortization of right to use asset - operating lease			84,883				85,978
Amortization of finance lease asset			9,942				9,942
Provision for credit losses			771,830				631,174
Amortization of loan origination fees			1,182				85,557
Options issued for services			14,100				21,150
Changes in operating assets and liabilities:
(Increase)/Decrease in prepaid expenses and other current assets			(72,168	)			87,788
(Increase)/Decrease in deferred tax asset, net			(84,000	)			(74,836	)
Increase/(Decrease) in drafts payable			970,764				1,178,938
Increase/(Decrease) in accrued expenses and other current liabilities			150,522				166,081
Increase/(Decrease) in operating lease liability			(84,882	)			(85,978	)
Net cash provided by operating activities			2,539,673				2,486,784
CASH FLOWS FROM INVESTING ACTIVITIES:
Disbursements under premium finance contracts receivable, net			(7,817,479	)			(10,913,030	)
Payments made on cash surrender value of life insurance			(40,544	)			(38,458	)
Proceeds from loan on cash surrender value of life insurance			641,934				-
Sale of property and equipment			19,571				-
Purchases of property and equipment			(59,646	)			(9,121	)
Net cash used in investing activities			(7,256,164	)			(10,960,609	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft			304,620				34,390
Proceeds of line of credit, net of repayments			1,414,011				8,652,392
Proceeds from notes payable			2,148,689				91,668
Repayment of notes payable			(100,000	)			(713,576	)
Proceeds from notes payable - stockholders and related parties			1,028,000				180,000
Repayment of notes payable - stockholders and related parties			(10,000	)			(27,000	)
Repayment of finance lease obligation			(9,810	)			(9,309	)
Proceeds of other loans			43,000				-
Repayment of other loans			(87,008	)			(68,801	)
Dividends paid on Series A Convertible Preferred Stock			(58,100	)			(87,150	)
Net cash provided by financing activities			4,673,402				8,052,614
NET CHANGE IN CASH			(43,089	)			(421,211	)
CASH AT THE BEGINNING OF THE PERIOD			45,239				421,211
CASH AT THE END OF THE PERIOD		$	2,150			$	-
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes		$	336,652			$	75,546
Interest paid		$	3,361,503			$	2,648,253
NON-CASH INVESTING AND FINANCING TRANSACTION:
Operating lease assets obtained in exchange for lease liabilities		$	235,335			$	-
Common stock issued in exchange for notes payable		$	76,960			$	-

See accompanying condensed notes to the consolidated unaudited financial statements.

Standard Premium Finance Holdings, Inc. and Subsidiary

Condensed Notes to Consolidated Financial Statements

September 30, 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 nocash equivalents at September 30, 2024 and December 31, 2023.

The Company experienced a cash overdraft of $473,163and $168,543in its group of bank accounts at its primary lender as of September 30, 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.

2. Summary of Significant Accounting Policies (Continued)

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).

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 eleven monthly payments, and manages these loans on a collective basis based on similar risk characteristics. As of September 30, 2024 and December 31, 2023, the portfolio has an amortized cost basis of $71,175,771and $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 September 30, 2024, and December 31, 2023, the amount of unearned premium on open and cancelled contracts approximated $99,500,000and $87,600,000, respectively. The annual percentage interest rates on new contracts averaged approximately 17.7% and 16.8% during the nine months ended September 30, 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 September 30, 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.

2. Summary of Significant Accounting Policies (Continued)

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.

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 $208,980and $250,200at September 30, 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 sheets:

		September 30, 2024 (unaudited)			December 31, 2023
Uninsured Balance		$	208,980			$	250,200
Plus: Insured balances			250,000				250,000
Plus: Balances at institutions that do not exceed FDIC limit			2,150				45,239
Plus: Cash overdraft			473,163				168,543
Less: Outstanding checks			(932,143	)			(668,743	)
Cash per consolidated balance sheet		$	2,150			$	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 66% and 61% of the Company's business activity is with customers located in Florida for 2024 and 2023, respectively. Approximately 9% and 11% of the Company's business activity is with customers located in Georgia for 2024 and 2023, respectively. Approximately 8% and 12% of the Company's business activity is with customers located in North Carolina for 2024 and 2023, respectively. There were no other significant regional, industrial or group concentrations during the nine months ended September 30, 2024 and 2023.

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.

2. Summary of Significant Accounting Policies (Continued)

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- 7years

Computer equipment and software 3- 5years

Leasehold improvements 10years

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 September 30, 2024 and December 31, 2023 was $693,606and $650,237, respectively. In March 2024, the Company executed a $641,934loan against the life insurance policy. The cash surrender value of the life insurance policy, net of the loan, was $48,847 and $650,237 at September 30, 2024 and December 31, 2023, respectively. The loan accrues interest at a blended interest rate of 6.64% and has no maturity date. The loan was funded in April 2024. The Company paid interest on this loan of $10,315and $0for the three months ended September 30, 2024 and 2023, respectively. The Company paid interest on this loan of $18,483and $0for the nine months ended September 30, 2024 and 2023, respectively.

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.

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 September 30, 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 September 30, 2024 and December 31, 2023.

2. Summary of Significant Accounting Policies (Continued)

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 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.

As of September 30, 2024 and 2023, stock options to purchase 111,200and 207,400shares of common stock were outstanding, respectively, and stock warrants to purchase 1,035,000shares of common stock were outstanding as described in Note 11. 93,700of these options vested on March 1, 2021, 93,700stock options vested on March 1, 2022, 10,000stock options vested on June 29, 2023, and the remaining 10,000stock options vested on June 29, 2024. All the stock warrants vested immediately. In August 2024, the Company exchanged $10,000of notes payable and $66,960of notes payable - related parties for 96,200shares of common stock at a price of $0.80per share from the exercise of incentive stock options by two employees. The following table summarizes the effects of the outstanding options and warrants on earnings per share:

		September 30, 2024 (unaudited)			September 30, 2023 (unaudited)
Options included in the calculation of diluted EPS			91,200				197,400
Vested but antidilutive options			20,000				-
Nonvested options			-				10,000
Total options outstanding			111,200				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 dilutive as of September 30, 2024 and anti-dilutive as of December 31, 2023.

2. Summary of Significant Accounting Policies (Continued)

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.

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.

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

At September 30, 2024 and December 31, 2023, premium finance contract and agents' receivable consists of the following:

Description		September 30, 2024			December 31, 2023
Insurance premium finance contracts outstanding		$	65,815,796			$	57,769,501
Insurance premium finance contracts cancelled			5,359,975				5,832,574
		71,175,771				63,602,075
Amounts due from agents			1,011,138				804,131
Less: Unearned interest			(2,552,431	)			(2,164,914	)
		69,634,478				62,241,292
Less: Allowance for credit losses			(1,849,130	)			(1,501,593	)
Total		$	67,785,348			$	60,739,699

The allowance for credit losses at September 30, 2024 and December 31, 2023 are as follows:

		September 30, 2024			December 31, 2023
Allowance for premium finance contracts		$	1,673,694			$	1,336,157
Allowance for amounts due from agents			175,436				165,436
Total allowance for credit losses		$	1,849,130			$	1,501,593

Activity in the allowance for credit losses for the nine months ended September 30, 2024 and the year ended December 31, 2023 are as follows:

		September 30, 2024			December 31, 2023
Balance at the beginning of the year		$	1,501,593			$	1,129,498
Current year provision			1,426,000				1,669,000
Direct write-downs charged against the allowance			(1,352,966	)			(1,639,416	)
Recoveries of amounts previously charged off			274,503				342,511
Balance at end of the year		$	1,849,130			$	1,501,593

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

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

		For the three months ended September 30,
		2024 (unaudited)			2023 (unaudited)
Current additions to the allowance		$	494,000			$	462,000
Less: Contra-revenues			(251,349	)			(177,607	)
Provision for credit losses		$	242,651			$	284,393

		For the nine months ended September 30,
		2024 (unaudited)			2023 (unaudited)
Current additions to the allowance		$	1,426,000			$	1,181,000
Less: Contra-revenues			(654,170	)			(549,826	)
Provision for credit losses		$	771,830			$	631,174

The aging analyses of past-due contract receivables as of September 30, 2024 and December 31, 2023 are as follows:

As of September 30, 2024		30-59 Days			60-89 Days			90-119 Days			Greater Than 120 Days			Total Past-Due			Current			Grand Total
Premium finance contracts:
Outstanding		$	244,966			$	4,700			$	-			$	8,311			$	257,977			$	65,557,819			$	65,815,796
Cancelled			930,793				719,178				494,661				2,291,940				4,436,572				923,403				5,359,975
Total		$	1,175,759			$	723,878			$	494,661			$	2,300,251			$	4,694,549			$	66,481,222			$	71,175,771

As of December 31, 2023		30-59 Days			60-89 Days			90-119 Days			Greater 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:

		September 30, 2024
		(unaudited)			December 31, 2023
Computer Software		$	25,857			$	26,207
Automobile			166,749				155,881
Furniture & Fixtures			5,692				14,273
Leasehold Improvements			116,811				116,811
Computer Equipment			52,534				73,145
Property and equipment, gross			367,643				386,317
Accumulated depreciation			(235,687	)			(263,817	)
Property and equipment, net		$	131,956			$	122,500

4. Property and Equipment, Net (Continued)

The Company recorded depreciation expense of $13,322and $6,625, respectively for the three months ended September 30, 2024 and 2023. The Company recorded depreciation expense of $30,619and $19,139, respectively for the nine months ended September 30, 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 September 30, 2024 and December 31, 2023.

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 $7,048per 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 $1,418per 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 $1,116per 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 $664per 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 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 lease payments are $1,249per month through December 2026.

The weighted-average remaining lease term was 2.17years and 1.97years as of September 30, 2024 and December 31, 2023, respectively. For the three months ended September 30, 2024 and 2023, the total lease cost was $34,655and $31,341, respectively. For the nine months ended September 30, 2024 and 2023, the total lease cost was $103,965and $85,610, respectively.

5. Leases (Continued)

				September 30, 2024
Leases		Classification		(unaudited)			December 31, 2023
Right-of-use assets		Operating lease assets		$	231,292			$	80,840
Server lease		Finance lease assets			28,722			38,664
Total lease assets				$	260,014			$	119,504
Current operating lease liability		Current operating lease liabilities		$	121,487			$	50,594
Non-current operating lease liability		Long-term operating lease liabilities			109,806				30,246
Total operating lease liabilities				$	231,293			$	80,840
Current finance lease liability		Current finance lease liabilities		$	13,694			$	13,166
Non-current finance lease liability		Long-term finance lease liabilities			17,055				27,393
Total finance lease liabilities				$	30,749			$	40,559

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 September 30, 2024 and December 31, 2023, the draft payable balances are $3,652,123and $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 $25,974,695to pay off the prior line of credit. On this date, the prior line of credit was fully repaid and terminated. The Company recorded $180,350of loan origination costs. In October 2021, the Company increased its line of credit with First Horizon Bank from $35,000,000to $45,000,000. The Company recorded $25,771of 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 $117,228of line of credit costs related to this extension, which is included in the line of credit balance in the consolidated balance sheet at September 30, 2024.

At September 30, 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 bears interest at 30-Day SOFR plus 2.55-2.96% per annum (7.95% at September 30, 2024 and 8.09% at December 31, 2023).As of September 30, 2024, the amount of principal outstanding on the line of credit was $43,791,747and is reported on the consolidated balance sheet net of $1,839of unamortized loan origination fees. As of December 31, 2023, the amount of principal outstanding on the line of credit was $42,377,736and is reported on the consolidated balance sheet net of $3,021of unamortized loan origination fees. Interest expense on this line of credit for the three months ended September 30, 2024 and 2023 totaled approximately $918,000and $837,000, respectively. Interest expense on this line of credit for the nine months ended September 30, 2024 and 2023 totaled approximately $2,749,000and $2,134,000, respectively. The Company recorded amortized loan origination fees for the three months ended September 30, 2024 and 2023 of $394and $28,519, respectively, which is included in interest expense. The Company recorded amortized loan origination fees for the nine months ended September 30, 2024 and 2023 of $1,182and $85,557, respectively, which is included in interest expense. Availability on this line of credit was $1,023,668as of September 30, 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 September 30, 2024 and December 31, 2023.

8. Other Loans

On April 18, 2020, the Company entered into a $271,000loan 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 matured in two (2) years and accrued interest at 1% from the origination of the loan.

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 $7,801beginning on May 18, 2022. For the three months ended September 30, 2024 and 2023, the Company paid interest on this loan of $178and $415, respectively, which is included in interest expense. For the nine months ended September 30, 2024 and 2023, the Company paid interest on this loan of $711and $1,409, respectively, which is included in interest expense. As of September 30, 2024 and December 31, 2023, the balance of the PPP loan is as follows:

		September 30, 2024 (unaudited)			December 31, 2023
Total PPP loan		$	54,424			$	123,924
Less current maturities			(54,424	)			(92,785	)
Long-term portion of PPP loan		$	-			$	31,139

On April 12, 2024, the Company entered into a $43,700loan agreement with American Express. The loan has a maturity date of April 12, 2025with a 10.89% fixed interest rate and monthly principal and interest payments of $3,860 beginning on May 13, 2024. For the three months ended September 30, 2024 and 2023, the Company paid interest on this loan of $656and $0, which is included in interest expense. For the nine months ended September 30, 2024 and 2023, the Company paid interest on this loan of $1,793and $0, which is included in interest expense.

9. Notes Payable

At September 30, 2024 and December 31, 2023, the balances of long-term unsecured notes to unrelated parties are as follows:

		September 30, 2024
		(unaudited)			December 31, 2023
Total notes payable - Others		$	8,904,246			$	6,865,557
Less current maturities			(2,870,992	)			(2,181,400	)
Long-term maturities		$	6,033,254			$	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 August 31, 2030. The maturity date of these notes automatically extends for periods of three months to six 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 $165,000and $120,000during the three months ended September 30, 2024 and 2023, respectively. Interest expense on these notes totaled approximately $425,000and $368,000during the nine months ended September 30, 2024 and 2023, respectively. The Company received proceeds on these notes of $2,148,689and $91,668for the nine months ended September 30, 2024 and 2023, respectively. The Company repaid principal on these notes of $100,000and $713,576for the nine months ended September 30, 2024 and 2023, respectively. In August 2024, the Company exchanged, in a cashless transaction, $10,000of these notes for 12,500shares of common stock at a price of $0.80per share from the exercise of previously vested incentive stock options by an employee. There were no gains or losses on this exchange.

10. Notes Payable - Stockholders and Related Parties

At September 30, 2024 and December 31, 2023, the balances of long-term notes payable to stockholders and related parties are as follows:

		September 30, 2024
		(unaudited)			December 31, 2023
Total notes payable - Others		$	8,904,246			$	6,865,557
Less current maturities			(2,870,992	)			(2,181,400	)
Long-term maturities		$	6,033,254			$	4,684,157

These are notes payable to stockholders and related parties. The notes have interest payable monthly of 8% per annum and are unsecured and subordinated. The principal is due on various dates through November 30, 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 $54,000and $41,000during the three months ended September 30, 2024 and 2023, respectively. Interest expense on these notes totaled approximately $152,000and $120,000during the nine months ended September 30, 2024 and 2023, respectively. The Company received proceeds on these notes of $1,028,000and $180,000for the nine months ended September 30, 2024 and 2023, respectively. The Company repaid principal on these notes of $10,000and $27,000for the nine months ended September 30, 2024 and 2023, respectively. In August 2024, the Company exchanged, in a cashless transaction, $66,960of these notes for 83,700shares of common stock at a price of $0.80per share from the exercise of previously vested incentive stock options by an employee. There were no gains or losses on this exchange.

11. Equity

Preferred Stock

As of September 30, 2024, the Company was authorized to issue 20million shares of preferred stock with a par value of $0.001per share, of which 600,000shares had been designated as Series A convertible and 166,000shares 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 $10for each share of preferred stock, plus all unpaid dividends that have been accrued, accumulated or declared. As of September 30, 2024, the total liquidation preference on the preferred stock is $1,718,100. 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 $10per share. During the three months ended September 30, 2024 and 2023, the Board of Directors has declared and paid dividends on the preferred stock of $29,050and $29,050, respectively. During the nine months ended September 30, 2024 and 2023, the Board of Directors has declared and paid dividends on the preferred stock of $58,100and $87,150, respectively. As of September 30, 2024 and December 31, 2023, preferred dividends are in arrears by $58,100and $29,050, respectively.

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 August 2024. June 30, 2024 and September 30, 2024 dividends in arrears have not been declared and paid.

Common Stock

As of September 30, 2024 and December 31, 2023, the Company was authorized to issue 100 millionshares of common stock with a par value of $0.001per share, of which 3,001,216and 2,905,016shares were issued and outstanding, respectively.

In August 2024, the Company exchanged $10,000of notes payable and $66,960of notes payable - related parties for 96,200shares of common stock at a price of $0.80per share from the exercise of incentive stock options by two employees.

11. Equity (Continued)

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 September 30, 2024:

	Outstanding Options				Vested Options
	Number Outstanding at September 30, 2024				Weighted Average Remaining Term				Weighted Average Exercise Price				Number Exercisable at September 30, 2024				Weighted Average Remaining Term				Weighted Average Exercise Price
	91,200				5.42			$	0.80				91,200				5.42			$	0.80
	10,000				7.75			$	4.50				10,000				7.75				4.50
	10,000				2.75			$	4.95				10,000				2.75				4.95
	111,200				5.39years			$	1.51				111,200				5.39years			$	1.51

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

			Number of Shares			Weighted Average Exercise Price			Weighted Average Remaining Contractual Term			Intrinsic Value
Outstanding at December 31, 2023				207,400			$	1.18				6.15years			$	705,224
Issued				-				-				-				-
Exercised				96,200			$	0.80				5.42years			$	76,960
Outstanding at September 30, 2024				111,200			$	1.51				5.39years			$	72,960
Exercisable at September 30, 2024				111,200			$	1.51				5.39years			$	72,960

In August 2024, the Company exchanged $10,000of notes payable and $66,960of notes payable - related parties for 96,200shares of common stock at a price of $0.80per share from the exercise of incentive stock options by two employees. During the three months ended September 30, 2024 and 2023, the Company recognized $0and $7,050, respectively, of stock option expense. During the nine months ended September 30, 2024 and 2023, the Company recognized $14,100and $21,150, respectively, of stock option expense. As of September 30, 2024, there was no remaining unvested equity compensation.

11. Equity (Continued)

Stock Warrants

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

			Number of Shares			Weighted Average Exercise Price			Weighted Average Remaining Contractual Term			Intrinsic Value
Outstanding at December 31, 2023				1,035,000			$	7.09				1.6years			$	355,600
Issued				-				-				-				-
Exercised				-				-				-				-
Outstanding at September 30, 2024				1,035,000			$	7.09				0.83years				-
Exercisable at September 30, 2024				1,035,000			$	7.09				0.83years				-

The warrants vested immediately. During each of the three and nine months ended September 30, 2024 and 2023, the Company recognized nostock 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 $7,048is paid monthly. The lease contract expires in February 2026.

12. Related Party Transactions (Continued)

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 $35,000,000to $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 loaned funds by its shareholders. As of September 30, 2024 and December 31, 2023, the amounts advanced were $3,039,040and $2,088,000, respectively.

Stock Options

As discussed in Note 11, on June 29, 2022, the Company issued 20,000stock 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 20,000stock 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 October 2024, the Company issued $50,000 of notes payable.

In November 2024, the Board of Directors declared and paid dividends on the Series A convertible preferred stock of $58,100.

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 and 2024, we have obtained additional licenses for a total of thirty-five 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 subordinated 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 63% ($43,789,908) of its capital and total liabilities as of September 30, 2024. As of September 30, 2024, the Company's subordinated notes payable and other loans represented approximately 17% ($12,023,202) of the Company's capital and total liabilities, operating liabilities provide approximately 9% ($6,092,894) of the Company's capital and total liabilities, preferred equity provides approximately 2% ($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 8% ($5,516,685) 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 September 30,
		2024 (unaudited)			2023 (unaudited)
Gross Revenue		$	3,073,347			$	2,594,359
Originations		$	35,929,761			$	34,666,931
Interest Earned Rate			18.25	%			16.97	%
Cost of Funds Rate, Gross			8.27	%			8.16	%
Cost of Funds Rate, Net			6.52	%			6.48	%
Reserve Ratio			2.45	%			2.05	%
Provision Rate			0.68	%			0.82	%
Return on Assets			1.54	%			0.59	%
Return on Equity			20.33	%			7.74	%

		As of or for the Nine Months Ended September 30,
		2024 (unaudited)			2023 (unaudited)
Gross Revenue		$	9,022,598			$	6,981,603
Originations		$	115,500,227			$	97,768,520
Interest Earned Rate			17.65	%			16.81	%
Cost of Funds Rate, Gross			8.42	%			7.64	%
Cost of Funds Rate, Net			6.32	%			5.73	%
Reserve Ratio			2.45	%			2.05	%
Provision Rate			0.67	%			0.65	%
Return on Assets			1.40	%			0.65	%
Return on Equity			17.91	%			8.25	%

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 September 30, 2024 Compared to the Three Months ended September 30. 2023

Summary of Comparative Results
		For the three months ended
		September 30, 2024 (unaudited)			September 30, 2023 (unaudited)			Increase/ (Decrease) ($)			Increase/ (Decrease) (%)
Revenues:
Finance Charges		$	2,680,586			$	2,237,445			$	443,141			19.8	%
Late Charges			301,302				267,111				34,191				12.8	%
Origination Charges			91,459				89,803				1,656				1.8	%
Gross Revenue			3,073,347				2,594,359				478,988				18.5	%
Expenses:
Interest			1,153,662				1,027,037				126,625				12.3	%
Salaries and wages			527,082				455,764				71,318				15.6	%
Commissions			411,114				309,259				101,855				32.9	%
Provision for credit losses			242,651				284,393				(41,742	)			(14.7	%)
Professional fees			49,249				71,986				(22,737	)			(31.6	%)
Postage			27,077				30,527				(3,450	)			(11.3	%)
Insurance			31,334				23,920				7,414				31.0	%
Other operating expenses			224,352				236,979				(12,627	)			(5.3	%)
Total costs and expenses			2,666,521				2,439,865				226,656				9.3	%
Income before income taxes			406,826				154,494				252,332				163.3	%
Provision for income taxes			106,199				37,564				68,635				182.7	%
Net income		$	300,627			$	116,930			$	183,697				157.1	%

Revenue

Revenue increased by 18.5% overall or $478,988 to $3,073,347 for the three months ended September 30, 2024 from $2,594,359 for the three months ended September 30, 2023. The increase in revenue was primarily due to a 19.8% or $443,141 increase in finance charges and a 12.8% or $34,191 increase in late charges. Revenue from finance charges comprised 87.2% and 86.2% of overall revenue for the three months ended September 30, 2024 and 2023, respectively.

During the three months ended September 30, 2024 compared to the three months ended September 30, 2023, the company financed an additional $1,262,830 in new loan originations, an increase of 3.6%. This increase was due largely to increased marketing efforts throughout our established states and new states, primarily by hiring additional marketing representatives in Florida and Texas. The total quantity of loan originations remained relatively stable for the three months ended September 30, 2024 as compared to the three months ended September 30, 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 9.3% or $226,656 to $2,666,521 for the three months ended September 30, 2024 from $2,439,865 for the three months ended September 30, 2023.

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

	·	$126,625 increase in interest expense as a result of 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 September 30, 2024 and 2023, our line of credit's interest rate was 7.95% and 8.08%, respectively. However, as of September 30, 2024, our net borrowings on the line of credit had increased by $2,318,008 to $43,791,747 from $41,473,739 at September 30, 2023. This increase in borrowings is due primarily to increased loan originations.
	·	$71,318 increase in salaries and wages expense primarily related to the hiring of additional marketing representatives in new and existing territories. The Company also offered general wage increases for its existing staff.
	·	$101,855 increase in commission expense as a result of increased originations.

The increase in expenses was offset due to a decrease in the following category:

·

$41,742 decrease in the provision for credit losses due to a change in the mix of write-offs that included more contra-revenues during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Income before Taxes

Income before taxes increased by $252,332 to $406,826 for the three months ended September 30, 2024 from $154,494 for the three months ended September 30, 2023. This increase was attributable to the net increases and decreases as discussed above.

Income Tax Provision

Income tax provision increased $68,635 to $106,199 for the three months ended September 30, 2024 from $37,564 for the three months ended September 30, 2023. This increase was primarily attributable to an increase in taxable income.

Net Income

Net Income increased by $183,697 to $300,627 for the three months ended September 30, 2024 from $116,930 for the three months ended September 30, 2023. This increase was attributable to the $252,332 increase in income before taxes related primarily to increased finance charge revenue partially offset by the $68,635 increase in the provision for income taxes.

Results of Operations for the Nine Months ended September 30, 2024 Compared to the Nine Months ended September 30. 2023

Summary of Comparative Results
		For the nine months ended
		September 30, 2024 (unaudited)			September 30, 2023 (unaudited)			Increase/ (Decrease) ($)			Increase/ (Decrease) (%)
Revenues:
Finance Charges		$	7,849,924			$	5,951,391			$	1,898,533				31.9	%
Late Charges			880,063				755,819				124,244				16.4	%
Origination Charges			292,611				274,393				18,218				6.6	%
Gross Revenue			9,022,598				6,981,603				2,040,995				29.2	%
Expenses:
Interest			3,352,760				2,724,850				627,910				23.0	%
Salaries and wages			1,590,218				1,306,839				283,379				21.7	%
Commissions			1,143,003				822,831				320,172				38.9	%
Provision for credit losses			771,830				631,174				140,656				22.3	%
Professional fees			237,598				237,819				(221	)			(0.1	%)
Postage			87,342				87,217				125				0.1	%
Insurance			129,897				86,971				42,926				49.4	%
Other operating expenses			703,290				600,981				102,309				17.0	%
Total costs and expenses			8,015,938				6,498,682				1,517,256				23.3	%
Income before income taxes			1,006,660				482,921				523,739				108.5	%
Provision for income taxes			259,779				121,070				138,709				114.6	%
Net income		$	746,881			$	361,851			$	385,030				106.4	%

Revenue

Revenue increased by 29.2% overall or $2,040,995 to $9,022,598 for the nine months ended September 30, 2024 from $6,981,603 for the nine months ended September 30, 2023. The increase in revenue was primarily due to a 31.9% or $1,898,533 increase in finance charges and a 16.4% or $124,244 increase in late charges. Revenue from finance charges comprised 87.0% and 85.2% of overall revenue for the nine months ended September 30, 2024 and 2023, respectively.

During the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, the company financed an additional $17,731,707 in new loan originations, an increase of 18.1%. This increase was due largely to increased marketing efforts throughout our established states and new states, primarily by hiring additional marketing representatives in Florida and Texas. The total quantity of loan originations remained relatively stable for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 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 23.3% or $1,517,256 to $8,015,938 for the nine months ended September 30, 2024 from $6,498,682 for the nine months ended September 30, 2023.

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

	·	$627,910 increase in interest expense as a result of 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 September 30, 2024 and 2023, our line of credit's interest rate was 7.95% and 8.08%, respectively. However, as of September 30, 2024, our net borrowings on the line of credit had increased by $2,318,008 to $43,791,747 from $41,473,739 at September 30, 2023. This increase in borrowings is due primarily to increased loan originations.
	·	$320,172 increase in commission expense as a result of increased originations.
	·	$283,379 increase in salaries and wages expense primarily related to the hiring of additional marketing representatives in new and existing territories. The Company also offered general wage increases for its existing staff.
	·	$140,656 increase in provision for credit losses as a result of increases to the size of the loan portfolio. We maintained consistent allowance practices throughout 2024, which kept the reserves adequate for the size of the growing loan receivable portfolio.
	·	$102,309 increase in other operating expenses as a result of general increases in overhead costs and a profit-sharing expense reversal during the nine months ended September 30, 2023 related to the transfer of assets from a profit-sharing plan to a 401(k) plan for employee benefit management.

Income before Taxes

Income before taxes increased by $523,739 to $1,006,660 for the nine months ended September 30, 2024 from $482,921 for the nine months ended September 30, 2023. This increase was attributable to the net increases and decreases as discussed above.

Income Tax Provision

Income tax provision increased $138,709 to $259,779 for the nine months ended September 30, 2024 from $121,070 for the nine months ended September 30, 2023. This increase was primarily attributable to an increase in taxable income.

Net Income

Net income increased by $385,030 to $746,881 for the nine months ended September 30, 2024 from $361,851 for the nine months ended September 30, 2023. This increase was attributable to the $523,739 increase in income before taxes related primarily to increased finance charge revenue offset by the $138,709 increase in the provision for income taxes.

LIQUIDITY and CAPITAL RESOURCES as of September 30, 2024

We had $2,150 of cash and a working capital surplus of $15,084,023 at September 30, 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 September 30, 2024, the Company's applicable margin was 2.75%. 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, but decrease over the next twelve months due to the expectations surrounding benchmark interest rate decreases by the Federal Reserve Board. We believe that we will be able to pass along a portion of the interest rate decreases to our net interest spread, which can improve profitability. 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 twelve months.

During the nine months ended September 30, 2024, the Company raised an additional $2,148,689 in subordinated notes payable - related parties and $1,028,000 in subordinated notes payable. The Company repaid $100,000 of notes payable and $10,000 of subordinated notes payable - related parties. 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 September 30, 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 September 30, 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 September 30, 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 and nine months ended September 30, 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 quarter ended September 30, 2024, no director or officer of the Company adoptedor terminateda contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or a non-Rule 10b5-1 trading arrangement.

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 Registrant's 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 3.4 to Registrant's Registration Statement on Form 10 filed on January 19, 2021)
4.1	Description of Securities. (Incorporated by reference to Exhibit 4.1 to Registrant's Annual Report on 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*	Form of Warrant to Purchase Common Stock. $4.00 Form of Warrant to Purchase Common Stock. $12.00 (Incorporated by reference to Exhibit 10.3 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	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)
10.6	Lease Agreement dated March 1, 2024 between Registrant and Marlenko Acquisitions, LLC. (Incorporated by reference to Exhibit 10.7 to Registrant's Annual Report on Form 10-K filed on March 15, 2024)
10.7*	Schedule of Employee Incentive Stock Options issued on March 1, 2020 and June 29, 2022. (Incorporated by reference to Exhibit 10.7 to Registrant's Annual Report on Form 10-K filed on March 17, 2023)
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 Annual Report on 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 Annual Report on Form 10-K filed on March 17, 2023)
10.11	Third Amendment to Loan Agreement dated November 14, 2023 among Standard Premium Finance Management Corporation and First Horizon Bank. (Incorporated by reference to Exhibit 10.12 to Registrant's Annual Report on Form 10-K filed on March 15, 2024)
10.12*	William Koppelmann Employment Contract. (Incorporated by reference to Exhibit 10.2 to Registrant's Form 8-K filed on July 6, 2022)
10.13*	Brian Krogol Employment Contract. (Incorporated by reference to Exhibit 10.3 to Registrant's Form 8-K filed on July 6, 2022)
10.14	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	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	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.

______________________________________

* 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: November 14, 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)