FPAY FlexShopper Inc

FlexShopper, Inc. (Nasdaq: FPAY), a prominent national online lease-to-own retailer and payment solutions provider, today announced the preliminary results of its previously disclosed unit rights offering (the “Rights Offering”), which expired at 5:00 pm ET on January 10, 2025 (the “Expiration Date”). The Company also announced that the holder of the Company’s subordinated debt has elected to convert 25%, or $2.5 million of the outstanding principal balance in the Rights Offering. The units sold at $1.70 were at a 15% discount to the 3-day volume weighted average price and included a share and 3 additional rights to purchase shares at discounts to the trading price.

Preliminary ProceedsAccording to Continental Stock Transfer & Trust Company (the “Subscription Agent”), as of the Expiration Date, approximately 5,547,993 subscription rights (the "Subscription Rights") have been exercised to purchase approximately 21% of the Company’s common stock.   Through the initial portion of the Subscription Rights offering, FlexShopper raised $9.4 million in gross proceeds.   There are an additional 21 million rights that can be exercised over the next 90 days at 30-day intervals for additional shares.

“I want to thank all of my fellow shareholders who subscribed to our subscription rights for their continuing support, confidence, and above all, trust in FlexShopper,” said Russ Heiser, CEO of FlexShopper. “The Rights Offering is an efficient, shareholder friendly, and accretive way to raise capital. At the end of the 2024 third quarter, our stock closed at $1.03 per share, representing a market cap of $22.1 million, compared to FlexShopper’s closing stock price at January 10, 2025 of $1.90 per share, representing a market cap over $54 million.   We believe this appreciation reflects the accretive nature of the Rights Offering’s use of proceeds, as well as the growing strength of our financial and operating results.”

Mr. Heiser continued: “Shareholders that participated in the Subscription Rights now have access to additional opportunities to increase their FlexShopper investment through the upcoming Series A, B, and C rights that expire over the next 30, 60, and 90 days, respectively. The same level of participation in the Series A, B, and C rights would raise a total of approximately $48 million, which we estimate would save approximately $8.5 million in annual dividend and interest expense.”

The Company intends to use the proceeds from the Rights Offering to repurchase over 90% of its Series 2 Convertible Preferred Stock, and by repaying a portion of its credit facility and other outstanding debt facilities. Any remaining proceeds will be used for general corporate purposes, including potential acquisitions of other companies. The shares subscribed for in the Subscription Rights are expected to be issued to participating stockholders on or about January 15, 2025.

Subordinated Debt ConversionNRNS Capital Holdings LLC (“NRNS”), the manager of which is the Chairman of FlexShopper’s Board of Directors, has elected to convert $2.5 million of the $10.75 million debt principal outstanding as of September 30, 2024 in the Rights Offering. At September 30, 2024, amounts outstanding under the NRNS Note bear interest at a rate of 19.21%. With the partial conversion of the NRNS subordinated debt the proforma outstanding balance is $8.25 million. FlexShopper estimates it will save approximately $0.5 million in annual interest expense as a result of the conversion.

Mr. Heiser concluded, “I’m excited by the direction FlexShopper is headed, as we increase our market share and execute against our growth oriented strategic plan. Equitizing our balance sheet is a powerful opportunity to expand earnings for our equity shareholders. I look forward to providing additional updates on our success in the coming months.”

FlexShopper encourages holders of the Series A, B, and C Rights to contact their broker or financial advisor’s Corporate Actions Department to participate in these subsequent rights. Rights offering information can be found at https://www.sec.gov and https://investors.flexshopper.com.

The offering was made pursuant to the Corporation’s registration statement on Form S-1 (File No. 333-282857), which was declared effective by the U.S. Securities and Exchange Commission on November 29, 2024. The prospectus relating to and describing the terms of the rights offering has been filed with the SEC on December 2, 2024, and is available on the SEC’s website at www.sec.gov. This announcement shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.

About FlexShopper, Inc.: FlexShopper, Inc. (Nasdaq: FPAY) is a leading national financial technology company that provides payment options to consumers. FlexShopper provides a variety of flexible funding options for underserved consumers through its online direct to consumer marketplace at flexshopper.com and in partnership with partner merchants both online as well as at brick and mortar locations. FlexShopper’s solutions are designed to meet the needs of a wide range of consumer segments via lease-to-own and lending products.

Forward-Looking StatementsAll statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “could,” “seek,” “intend,” “plan,” “goal,” “estimate,” “anticipate,” or other comparable terms. Examples of forward-looking statements include, among others, statements we make regarding expectations of lease originations, the expansion of our lease-to-own program; expectations concerning our partnerships with retail partners; investments in, and the success of, our underwriting technology and risk analytics platform; our ability to collect payments due from customers; expected future operating results and expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including, among others, the following: our ability to obtain adequate financing to fund our business operations in the future; the failure to successfully manage and grow our FlexShopper.com e-commerce platform; our ability to maintain compliance with financial covenants under our credit agreement; our dependence on the success of our third-party retail partners and our continued relationships with them; our compliance with various federal, state and local laws and regulations, including those related to consumer protection; the failure to protect the integrity and security of customer and employee information; and the other risks and uncertainties described in the Risk Factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. The forward-looking statements made in this release speak only as of the date of this release, and FlexShopper assumes no obligation to update any such forward-looking statements to reflect actual results or changes in expectations, except as otherwise required by law.

Company Contact:FlexShopper, Inc.Investor Relationsir@flexshopper.com

Investor and Media ContactAndrew BergerManaging DirectorSM Berger & Company, Inc.Tel (216) 464-6400andrew@smberger.com