FlexShopper, Inc. Reports 2023 Fourth Quarter and Year End Financial Results

BOCA RATON, Fla., April 01, 2024 (GLOBE NEWSWIRE) -- FlexShopper, Inc. (Nasdaq:FPAY) (“FlexShopper”), a leading national online lease-to-own (“LTO”) retailer and payment solution provider for underserved consumers, today announced its financial results for the quarter ended December 31, 2023.

Results for Quarter Ended December 31, 2023, vs. Quarter Ended December 31, 2022:

  • Total fundings increased 12.0% to $35.4 million from $31.6 million  
  • Total net lease and loan revenues and fees increased 40.9% to $30.3 million from $21.5 million  
  • Gross profit increased 315.8% to $15.8 million from $3.8 million  
  • Adjusted EBITDA1 increased by $12.0 million to $8.1 million from ($3.9) million  
  • Operating income of $5.6 million compared with operating loss of $5.5 million  
  • Net loss attributable to common stockholders of $(715) thousand, or $(0.03) per diluted share, compared to net income attributable to common stockholders of $6.0 million, or $0.27 per diluted share

Results for Twelve Months Ended December 31, 2023, vs. Twelve Months Ended December 31, 2022:

  • Total fundings increased 7.7% to $120.4 million from $111.8 million  
  • Total net lease and loan revenues and fees increased 3.4% to $117.0 million from $113.1 million  
  • Gross profit increased 47.4% to $54.7 million from $37.1 million  
  • Adjusted EBITDA1 increased by $23.7 million to $23.2 million compared to ($0.5) million  
  • Operating income of $13.7 million compared with operating loss of $6.3 million  
  • Net loss attributable to common stockholders of $8.3 million, or $(0.51) per diluted share, compared to net income attributable to common stockholders of $9.9 million, or $0.44 per diluted share
¹Adjusted EBITDA is a non-GAAP financial measure. Refer to the definition and reconciliation of this measure under “Non-GAAP Measures”.

Subsequent Events:

On March 27, 2024, FlexShopper refinanced all the obligations under the 2015 Credit Agreement owed to the Administrative Agent and the lenders, and all liens held by any of the lenders or the Administrative Agent, were discharged and released. The Administrative Agent, the lenders and FlexShopper terminated the 2015 Credit Agreement.

On March 27, 2024, FlexShopper, through a wholly owned subsidiary (“Borrower”), entered into a new credit agreement (the “2024 Credit Agreement”) with Computershare Trust Company, National Association, as paying agent, various lenders from time to time party thereto and Powerscourt Investment 50, LP, an affiliate of Waterfall Asset Management, LLC, as administrative agent and lender (“Lender”). The Borrower is permitted to borrow funds under the 2024 Credit Agreement based on the Company’s cash on hand and the Amortized Order Value of its Eligible Leases (as defined in the 2024 Credit Agreement), less certain deductions described in the 2024 Credit Agreement. Under the terms of the 2024 Credit Agreement, subject to the satisfaction of certain conditions, the Borrower may borrow up to $150,000,000 from the Lender until the Commitment Termination Date and must repay all borrowed amounts one year thereafter, on the date that is 12 months following the Commitment Termination Date (unless such amounts become due or payable on an earlier date pursuant to the terms of the Credit Agreement). The Commitment Termination Date is April 1, 2026. The Company granted a security interest to the Lender in certain leases and loans as collateral under the 2024 Credit Agreement. The interest rate charged on amounts borrowed is SOFR plus 9% per annum.

The 2024 Credit Agreement includes customary events of default, including, among others, failures to make payment of principal and interest, deficiencies in the borrowing base, and bankruptcy events.

Conference Call and Webcast Details

Conference call

Date: Tuesday, April 2, 2024
Time: 8:30 a.m. Eastern Time
Participant Dial-In Numbers:

Domestic callers: (877) 407-2988
International callers: +1 (201) 389-0923

Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=gSrwUmm0

The call will also be simultaneously webcast over the Internet via the “Investor” section of the Company’s website at www.flexshopper.com or by clicking on the conference call link:


An audio replay of the call will be archived on the Company’s website.

 For the years ended
December 31,
 2023  2022 
Lease revenues and fees, net$91,943,729  $105,936,072 
Loan revenues and fees, net of changes in fair value 25,031,278   7,120,101 
Total revenues 116,975,007   113,056,173 
Costs and expenses:       
Depreciation and impairment of lease merchandise 56,288,128   72,556,431 
Loan origination costs and fees 6,007,598   3,384,013 
Marketing 7,620,795   11,031,695 
Salaries and benefits 12,499,099   10,991,477 
Operating expenses 24,547,729   21,395,767 
Net change in fair value of promissory note related to acquisition (3,678,689)  - 
Total costs and expenses 103,284,660   119,359,383 
Operating income/ (loss) 13,690,347   (6,303,210)
Gain on bargain purchase -   14,461,274 
Interest expense including amortization of debt issuance costs (18,913,773)  (11,161,396)
Loss before income taxes (5,223,426)  (3,003,332)
Benefit from income taxes 989,809   16,635,051 
Net (loss)/ income (4,233,617)  13,631,719 
Dividends on Series 2 Convertible Preferred Shares 4,103,638   3,730,580 
Net (loss)/ income attributable to common and Series 1 Convertible Preferred shareholders$(8,337,255) $9,901,139 
Basic and diluted (loss)/ income per common share:       
Basic$(0.51) $0.45 
Diluted$(0.51) $0.44 
Basic 16,260,349   21,646,896 
Diluted 16,260,349   22,425,354 

 December 31,  December 31, 
 2023  2022 
Cash$4,413,130  $6,051,713 
Restricted cash -   121,636 
Lease receivables, net 44,795,090   35,540,043 
Loan receivables at fair value 35,794,290   32,932,504 
Prepaid expenses and other assets 3,300,677   3,489,136 
Lease merchandise, net 29,131,440   31,550,441 
Total current assets 117,434,627   109,685,473 
Property and equipment, net 9,308,859   8,086,862 
Right of use asset, net 1,237,010   1,406,270 
Intangible assets, net 13,391,305   15,162,349 
Other assets, net 2,175,215   1,934,728 
Deferred tax asset, net 12,943,361   12,013,828 
Total assets$156,490,377  $148,289,510 
Accounts payable$7,139,848  $6,511,943 
Accrued payroll and related taxes 578,197   310,820 
Promissory notes to related parties, including accrued interest 198,624   1,209,455 
Accrued expenses 3,972,397   3,988,093 
Lease liability - current portion 245,052   208,001 
Total current liabilities 12,134,118   12,228,312 
Loan payable under credit agreement to beneficial shareholder, net of unamortized issuance costs of $70,780 at December 31,2023 and $352,252 at December 31,2022 96,384,220   80,847,748 
Promissory notes to related parties, net of unamortized issuance costs of $649,953 at December 31, 2023 and $0 at December 31, 2022, and net of current portion 10,100,047   10,750,000 
Promissory note related to acquisition, net of discount of $1,165,027 at December 31, 2022 -   3,158,471 
Loan payable under Basepoint credit agreement, net of unamortized issuance costs of $92,963 at December 31, 2023 7,319,641   - 
Purchase consideration payable related to acquisition -   8,703,684 
Lease liabilities, net of current portion 1,321,578   1,566,622 
Total liabilities 127,259,604   117,254,837 
Series 1 Convertible Preferred Stock, $0.001 par value - authorized 250,000 shares, issued and outstanding 170,332 shares at $5.00 stated value 851,660   851,660 
Series 2 Convertible Preferred Stock, $0.001 par value - authorized 25,000 shares, issued and outstanding 21,952 shares at $1,000 stated value 21,952,000   21,952,000 
Common stock, $0.0001 par value- authorized 40,000,000 shares, issued and outstanding 21,752,304 shares at December 31, 2023 and 21,750,804 shares at December 31, 2022 2,176   2,176 
Treasury shares, at cost- 164,029 shares at 2023 (166,757)  - 
Additional paid in capital 42,415,894   39,819,420 
Accumulated deficit (35,824,200)  (31,590,583)
Total stockholders’ equity 29,230,773   31,034,673 
 $156,490,377  $148,289,510 

For the years ended December 31, 2023 and 2022
 2023  2022 
Net (loss)/ income$(4,233,617) $13,631,719 
Adjustments to reconcile net (loss)/ income to net cash used in operating activities:       
Depreciation and impairment of lease merchandise 56,288,128   72,556,431 
Other depreciation and amortization 7,881,110   4,769,614 
Amortization of debt issuance costs 571,538   228,843 
Amortization of discount on the promissory note related to acquisition 236,952   19,747 
Compensation expense related to stock-based compensation 1,677,708   997,830 
Provision for doubtful accounts 42,505,647   57,420,480 
Interest in kind added to promissory notes balance -   155,093 
Deferred income tax (929,533)  (17,282,364)
Net change in fair value of promissory note related to acquisiton (3,678,689)  - 
Gain on bargain purchase -   (14,461,274)
Net changes in the fair value of loan receivables at fair value (10,217,854)  9,559,979 
Changes in operating assets and liabilities, net of effects of acquisition:       
Lease receivables (51,760,694)  (67,487,369)
Loan receivables at fair value 7,356,068   (25,612,049)
Prepaid expenses and other assets 177,169   (1,670,836)
Lease merchandise (53,869,127)  (63,164,760)
Purchase consideration payable related to acquisition 208,921   164,102 
Promissory note related to acquisition 283,266   - 
Lease liabilities (30,268)  (14,488)
Accounts payable 627,905   (1,976,844)
Accrued payroll and related taxes 267,377   (80,258)
Accrued expenses (26,527)  1,009,468 
Net cash used in operating activities (6,664,520)  (31,236,936)
Cash acquired in business combination -   2,938,355 
Purchases of property and equipment, including capitalized software costs (6,335,276)  (6,498,115)
Purchases of data costs (1,225,983)  (1,640,885)
Net cash used in investing activities (7,561,259)  (5,200,645)
Proceeds from loan payable under credit agreement 18,050,000   36,455,000 
Repayment of loan payable under credit agreement (2,795,000)  (5,730,000)
Repayment of loan payable under Basepoint credit agreement (1,500,000)  - 
Repayment of promissory notes to related parties (1,000,000)  - 
Debt issuance related costs (115,403)  (166,745)
Proceeds from exercise of stock options 1,185   261,505 
Proceeds from promissory notes to related parties -   7,000,000 
Principal payment under finance lease obligation (8,465)  (11,184)
Repayment of purchase consideration payable related to acquisition -   (283,266)
Repayment of installment loan -   (9,022)
Purchases of Treasury Stock (166,757)  - 
Net cash provided by financing activities 12,465,560   37,516,288 
(DECREASE)/ INCREASE IN CASH and RESTRICTED CASH (1,760,219)  1,078,707 
CASH and RESTRICTED CASH, beginning of period 6,173,349   5,094,642 
CASH and RESTRICTED CASH, end of period$4,413,130  $6,173,349 
Supplemental cash flow information:       
Interest paid$17,337,292  $10,289,334 
Due date extension of warrants$917,581  $- 
Noncash investing and financing activities       
Acquisition of loan receivables at fair value$-  $13,320,326 
Acquisition of property and equipment -   136,249 
Acquisition of intangible assets -   15,307,894 
Acquisition of purchase consideration payable related to acquisition -   8,539,582 
Acquisition of accounts payable -   506,607 
Acquisition of deferred tax liability -   4,773,370 
Issuance of promissory note related to acquisition -   3,421,991 

Non-GAAP Measures

We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.

Adjusted EBITDA represents net income before interest, stock-based compensation, taxes, depreciation (other than depreciation of leased merchandise), amortization, and one-time or non-recurring items. We believe that Adjusted EBITDA provides us with an understanding of one aspect of earnings before the impact of investing and financing charges and income taxes.

Key performance metrics for the years ended December 31, 2023 and 2022 were as follows:

 2023  2022  $ Change  % Change 
Adjusted EBITDA:           
Net (loss)/ income$(4,233,617) $13,631,719  $(17,865,336)  (131.1)
Income taxes (989,809)  (16,635,051)  15,645,242   (94.0)
Amortization of debt issuance costs 571,538   228,843   342,695   149.8 
Amortization of discount on the promissory note related to acquisition 236,952   19,746   217,206   1,100.0 
Other amortization and depreciation 7,881,110   4,769,614   3,111,496   65.2 
Interest expense 18,105,282   10,912,808   7,192,474   65.9 
Stock-based compensation 1,677,708   997,830   679,878   68.1 
Gain on bargain purchase -   (14,461,274)  14,461,274     
Adjusted EBITDA$23,249,164  $(535,765) $23,784,929   (4,439.4)

The Company refers to Adjusted EBITDA in the above table as the Company uses this measure to evaluate operating performance and to make strategic decisions about the Company. Management believes that Adjusted EBITDA provides relevant and useful information which is widely used by analysts, investors and competitors in its industry in assessing performance.

About FlexShopper

FlexShopper, Inc. (FPAY) is a financial technology company that provides electronics, home furnishings and other durable goods to underserved consumers on a lease-to-own (LTO) basis through its patented e-commerce marketplace (www.FlexShopper.com). FlexShopper also provides LTO and loan technology platforms to a growing number of retailers and e-retailers to facilitate transactions with consumers without access to traditional financing.

Forward-Looking Statements

All 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.


FlexShopper, Inc.
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FlexShopper, Inc.