FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the transition period from _______ to _______ Commission file number: 001-37945 FLEXSHOPPER, INC. (Exact name of registrant as specified in its charter) Delaware 20-5456087 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) 901 Yamato Road, Suite 260, Boca Raton, Florida 33431 (Address of Principal Executive Offices) (Zip Code) (855) 353-9289 (Registrant's Telephone Number, ...

FlexShopper, Inc. (NASDAQ:FPAY) Q4 2022 Results Conference Call April 25, 2023 8:30 AM ET Company Participants Carlos Sanchez - IR Russ Heiser - CEO John Davis - COO Howard Dvorkin - Chairman Conference Call Participants Scott Buck - H.C. Wainwright Michael Diana - Maxim Group Operator Greetings and welcome to the FlexShopper, Inc. 2022 Fourth Quarter and Fiscal Year Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduc ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) FlexShopper is a financial technology company offering lease-to-own and loan products to subprime consumers - The company's core business provides lease-purchase and loan solutions to consumers in the **near-prime or subprime FICO score categories**[13](index=13&type=chunk) - In late 2022, FlexShopper acquired the assets of Revolution Financial, Inc, enabling a **direct loan origination model in 11 states**[16](index=16&type=chunk) - The company operates through three main sales channels: its direct-to-consumer online marketplace, integration with merchant partners' e-commerce checkouts, and in-store LTO facilitation at retail locations[14](index=14&type=chunk) - As of December 31, 2022, the company had **118 full-time employees**, none of whom were part of a collective bargaining agreement[55](index=55&type=chunk) 2022 Key Business Metrics | Metric | Value (USD) | | :--- | :--- | | Net Lease Revenues and Fees | ~$106 million | | Loan Participations Purchased | $31 million | | Interest Income Recognized | $15 million | [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant liquidity, credit, regulatory, and stock delisting risks - The company's liquidity is heavily dependent on a Credit Agreement with an outstanding balance of **$81.2 million** as of December 31, 2022[60](index=60&type=chunk) - A significant portion of the customer base presents a **high risk of default**, which is sensitive to adverse economic conditions[65](index=65&type=chunk)[70](index=70&type=chunk) - The business is subject to extensive regulation at federal and state levels for LTO and consumer finance transactions, which could expose the company to significant compliance costs or penalties[78](index=78&type=chunk)[80](index=80&type=chunk) - The company's common stock is at risk of being **delisted from The Nasdaq Capital Market** for failing to maintain a minimum bid price of $1.00 per share[109](index=109&type=chunk)[110](index=110&type=chunk) - There is a significant concentration of stock ownership, with one entity holding **21.0% of voting power** and executives and directors holding an additional **26.6%**[107](index=107&type=chunk) [Properties](index=21&type=section&id=Item%202.%20Properties) The company leases its corporate headquarters in Florida and holds multiple storefront leases from an acquisition - The main corporate office in Boca Raton, FL is leased through June 30, 2028, with a monthly rent of approximately **$31,500**[118](index=118&type=chunk) - As part of the Revolution acquisition, the company assumed **19 storefront leases** in Alabama, Michigan, Nevada, and Oklahoma[121](index=121&type=chunk) [Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no material pending legal proceedings as of the reporting date - There are **no material pending legal proceedings** against the company[122](index=122&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on Nasdaq, no dividends are paid, and significant preferred stock dividends have accrued - The company's common stock trades on The Nasdaq Capital Market with the ticker symbol **"FPAY"**[126](index=126&type=chunk) - No cash dividends have been paid on common stock, and future payments are not anticipated due to restrictions in its Credit Agreement[127](index=127&type=chunk) - Cumulative accrued dividends on the series 2 convertible preferred stock amounted to **$19,084,376** as of December 31, 2022[128](index=128&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2022 saw decreased revenue and an operating loss, but a one-time gain boosted net income significantly - Net lease revenues decreased by **14.9%** in 2022 due to a lower volume of lease originations, although the average origination value per lease increased[146](index=146&type=chunk) - Net loan revenues grew significantly by **672.8% to $7.1 million**, driven by the expansion of the bank partner loan program[146](index=146&type=chunk)[147](index=147&type=chunk) - The provision for doubtful accounts increased by **42.3% to $57.4 million**, representing 37% of gross lease billings, up from 24% in 2021[146](index=146&type=chunk) - A gain on bargain purchase of **$14.5 million** was recognized from the acquisition of Revolution Financial, Inc, significantly boosting net income[157](index=157&type=chunk) - The company's liquidity is supported by its Credit Agreement, which was amended in October 2022 to increase the commitment amount to **$110 million**[168](index=168&type=chunk) Key Performance Metrics (2022 vs 2021) | Metric | 2022 (USD) | 2021 (USD) | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | 113,056,173 | 125,426,756 | (9.9%) | | Gross Profit | 37,115,729 | 46,248,870 | (19.7%) | | Net Income | 13,631,719 | 3,272,774 | 316.5% | | Adjusted EBITDA | (535,766) | 11,376,540 | (104.7%) | [Financial Statements and Supplementary Data](index=31&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The financial statements show asset and liability growth, with net income boosted by a bargain purchase gain - The company acquired the assets of Revolution Financial, Inc on December 3, 2022, resulting in a **bargain purchase gain of $14,461,274**[358](index=358&type=chunk)[359](index=359&type=chunk)[360](index=360&type=chunk) - In Q2 2022, the company released its entire deferred tax asset valuation allowance, resulting in a tax benefit of approximately **$12.5 million** for the year[338](index=338&type=chunk)[339](index=339&type=chunk) Consolidated Balance Sheet Summary (as of Dec 31) | Account | 2022 (USD) | 2021 (USD) | | :--- | :--- | :--- | | Total Assets | 148,289,510 | 84,812,056 | | Total Liabilities | 117,254,837 | 68,668,437 | | Total Stockholders' Equity | 31,034,673 | 16,143,619 | Consolidated Statement of Operations Summary (Year Ended Dec 31) | Account | 2022 (USD) | 2021 (USD) | | :--- | :--- | :--- | | Total Revenues | 113,056,173 | 125,426,756 | | Operating (Loss)/Income | (6,303,210) | 7,364,819 | | Net Income | 13,631,719 | 3,272,774 | | Basic EPS | $0.45 | $0.04 | [Controls and Procedures](index=64&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management identified a material weakness in internal controls related to a recent business combination - Management identified a **material weakness in internal control over financial reporting** as of December 31, 2022[375](index=375&type=chunk) - The weakness stemmed from a lack of effective controls over accounting judgments related to the complex business combination with Revolution Financial[376](index=376&type=chunk) - Despite the material weakness, management believes the financial statements are **fairly presented in all material respects**[377](index=377&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=65&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company details its board composition, executive leadership, committee structure, and key governance policies - The Board of Directors is comprised of five members: Howard S Dvorkin (Chairman), James D Allen, Sean Hinze, Thomas O Katz, and T Scott King[385](index=385&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk)[390](index=390&type=chunk)[391](index=391&type=chunk) - H Russell Heiser Jr was appointed CEO effective March 20, 2023, while also serving as CFO; John Davis serves as COO[393](index=393&type=chunk)[394](index=394&type=chunk) - The Board has determined that **four of its five directors are independent** under Nasdaq standards[397](index=397&type=chunk) - The company has a **clawback policy** allowing the Board to recoup performance-based compensation from executives if financial results are restated[414](index=414&type=chunk) [Executive Compensation](index=73&type=section&id=Item%2011.%20Executive%20Compensation) This section outlines compensation for named executive officers and directors, including salaries, bonuses, and equity - Following the passing of former CEO Richard House Jr, his employment agreement was terminated, and his estate received accrued obligations with all equity awards vested[440](index=440&type=chunk) - Effective March 20, 2023, CEO H Russell Heiser Jr's new employment agreement includes a base salary of **$460,000** and a target bonus of up to **50% of base salary**[441](index=441&type=chunk)[442](index=442&type=chunk) - Non-executive director compensation includes an annual retainer of **$60,000** ($100,000 for the Chairman) and an annual stock option grant valued at **$94,000** ($150,000 for the Chairman)[456](index=456&type=chunk) 2022 Summary Compensation Table | Name and Principal Position | Salary ($) | Bonus ($) | Option Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | | Richard House Jr (Former CEO) | 457,500 | 70,000 | 227,899 | 789,531 | | H Russell Heiser Jr (CEO & CFO) | 359,231 | - | 153,347 | 561,231 | | John Davis (COO) | 353,962 | 50,000 | 64,176 | 492,684 | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=78&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership is highly concentrated among a few beneficial owners and the executive management group Security Ownership of Major Holders (as of March 31, 2023) | Name of Beneficial Owner | Percentage of Shares Beneficially Owned | | :--- | :--- | | B2 FIE V, LLC | 19.7% | | Waterfall Asset Management, LLC | 7.5% | | Perkins Capital Management, Inc | 5.9% | | Howard S Dvorkin (Chairman) | 25.2% | | All directors and executive officers as a group | 48.5% | [Certain Relationships and Related Transactions, and Director Independence](index=80&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company discloses significant related-party transactions, including credit facilities with major shareholders and executives - The company's primary Credit Agreement is with an affiliate of Waterfall Asset Management, LLC, a beneficial owner of over 5% of the company's stock; as of Dec 31, 2022, **$81.2 million was outstanding**[470](index=470&type=chunk)[475](index=475&type=chunk) - A subordinated promissory note with an entity managed by Chairman Howard S Dvorkin had its credit commitment increased to **$11 million** in February 2022[476](index=476&type=chunk)[477](index=477&type=chunk) - A **$1 million** subordinated promissory note is outstanding with an entity of which CEO/CFO H Russell Heiser, Jr is a member[478](index=478&type=chunk) [Principal Accounting Fees and Services](index=82&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This section details the fees paid to the company's principal accountants for audit and tax services in 2022 and 2021 Principal Accountant Fees | Fee Category | 2022 (Grant Thornton LLP) | 2021 (EisnerAmper LLP) | | :--- | :--- | :--- | | Audit Fees | $495,000 | $370,290 | | Tax Fees | $25,000 | - | | **Total** | **$520,000** | **$370,290** | Part IV [Exhibits and Financial Statement Schedules](index=83&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements and exhibits filed with the Form 10-K, including material contracts - The financial statements are filed under Item 8 and incorporated by reference[490](index=490&type=chunk) - A detailed list of **57 exhibits** is provided, including corporate governance documents, material contracts like the Credit Agreement and its 16 amendments, and executive compensation plans[491](index=491&type=chunk)[492](index=492&type=chunk)[493](index=493&type=chunk)[494](index=494&type=chunk)

FlexShopper, Inc. (NASDAQ:FPAY) Q3 2022 Earnings Conference Call November 11, 2022 10:00 AM ET Company Participants Carlos Sanchez - IR Rich House - CEO Russ Heiser - CFO John Davis - COO Conference Call Participants Scott Buck - H.C. Wainwright Operator Greetings, ladies and gentlemen, and welcome to FlexShopper 2022 Third Quarter Financial Results Conference Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instruction ...

Investor Presentation November 2022 Safe Harbor Statement & Use of Non-GAAP Information Forward Looking Statements This presentation includes forward looking statements that are made pursuant to the "safe harbor" provisions of the private securities litigation reform act of 1995 Forward looking statements reflect our current views with respect to future events and involve inherent risks and uncertainties which could cause actual results to differ materially from our historical experience and present expecta ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number: 001-37945 FlexShopper, Inc. (Exact name of registrant as specified in its charter) | Delaware | 20-5456087 | | --- | --- | | ...

FlexShopper, Inc. (NASDAQ:FPAY) Q2 2022 Earnings Conference Call August 11, 2022 9:00 AM ET Company Participants Carlos Sanchez – Investor Relations Rich House – Chief Executive Officer Russ Heiser – Chief Financial Officer John Davis – Chief Operating Officer Conference Call Participants Scott Buck – H.C. Wainwright Michael Diana – Maxim Group Operator Greetings, ladies and gentlemen, and welcome to FlexShopper, LLC 2022 Second Quarter Financial Results Conference Call. At this time all participants are in ...

Investor Presentation August 2022 Safe Harbor Statement & Use of Non-GAAP Information Forward Looking Statements This presentation includes forward looking statements that are made pursuant to the "safe harbor" provisions of the private securities litigation reform act of 1995 Forward looking statements reflect our current views with respect to future events and involve inherent risks and uncertainties which could cause actual results to differ materially from our historical experience and present expectati ...

FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | Delaware | 20-5456087 | | --- | --- | | (State or Other Jurisdiction of | (I.R.S. Employer | | Incorporation or Organization) | Identification No.) | | 901 Yamato Road, Suite 260, Boca Raton, Florida | ...

Financial Performance - Total revenues for Q1 2022 were $28,955,236, a decrease of 11.1% from $32,783,670 in Q1 2021[14] - Net loss for Q1 2022 was $2,380,935, compared to a net income of $1,237 in Q1 2021, resulting in a basic and diluted loss per common share of $(0.14) compared to $(0.03) in Q1 2021[14] - Operating loss for Q1 2022 was $(1,282,647), a decline from an operating income of $1,400,234 in Q1 2021[14] - Adjusted EBITDA for Q1 2022 was $(40,356), a decrease of $2,482,250 compared to $2,441,894 in Q1 2021[138] - For the three months ended March 31, 2022, the net loss attributable to common and Series 1 Convertible Preferred Shareholders was $2,990,712 compared to a net loss of $608,535 for the same period in 2021[49] Assets and Liabilities - Total current assets increased to $78,524,992 as of March 31, 2022, from $76,893,272 as of December 31, 2021, primarily driven by an increase in accounts receivable[12] - Total liabilities rose to $72,820,725 as of March 31, 2022, compared to $68,668,437 as of December 31, 2021, reflecting an increase in loan payable under credit agreements[12] - Total stockholders' equity decreased to $14,204,970 as of March 31, 2022, from $16,143,619 as of December 31, 2021, primarily due to the net loss incurred[12] - The net leased merchandise balance as of March 31, 2022, was $36,597,829, down from $40,942,112 as of December 31, 2021[31] Cash Flow and Liquidity - Cash and cash equivalents decreased to $4,319,701 at the end of Q1 2022 from $5,094,642 at the end of Q4 2021, indicating a cash outflow[17] - The Company’s liquidity as of March 31, 2022, was $4,319,701, exceeding the required minimum of $1,500,000[84] - Net cash used in operating activities was $7,940,659 for the three months ended March 31, 2022, primarily due to purchases of leased merchandise and changes in accounts receivable and accounts payable[166] - Net cash provided by financing activities was $8,719,528 for the three months ended March 31, 2022, due to $6,800,000 drawn on the Credit Agreement and $3,000,000 from Promissory Notes[169] Accounts Receivable and Credit Risk - The company reported a provision for doubtful accounts of $11,831,117 in Q1 2022, up from $8,833,349 in Q1 2021, indicating increased credit risk[17] - As of March 31, 2022, accounts receivable totaled $51,988,768, with an allowance for doubtful accounts of $22,450,828, resulting in net accounts receivable of $29,537,940[29] - The provision for doubtful accounts increased to $11,831,117 for the three months ended March 31, 2022, compared to $8,833,349 for the same period in 2021, indicating a rise in expected credit losses[38] - The company recognized charge-offs of $17,083,567 for accounts receivable during the three months ended March 31, 2022, compared to $7,036,164 for the same period in 2021[127] Marketing and Operating Expenses - Marketing expenses increased to $2,014,115 in Q1 2022, compared to $1,832,740 in Q1 2021, reflecting a strategic push in customer acquisition[14] - Other operating expenses rose to $5,673,202 in Q1 2022, an increase of $1,558,778 or 37.9% from $4,114,424 in Q1 2021[145] - Travel expenses surged by $169,893 or 291.5% to $228,179 in Q1 2022, attributed to the expansion of retail partner rollouts[148] - Customer verification expenses decreased by $715,068 or 83.4% to $142,757 for the three months ended March 31, 2022, compared to $857,825 in the same period of 2021[149] Financing Activities - The company generated $6,800,000 in proceeds from loan payable under credit agreements in Q1 2022, compared to $3,500,000 in Q1 2021, indicating increased financing activity[17] - Interest expense under the Credit Agreement for Q1 2022 was $1,551,844, compared to $1,125,239 for Q1 2021, with an outstanding balance of $56,150,000 as of March 31, 2022[86] - The Commitment Amount under the Credit Agreement was increased to $82,500,000 as of March 8, 2022, allowing for greater borrowing capacity[83] Stock and Equity - The Company sold 20,000 shares of Series 2 Convertible Preferred Stock for gross proceeds of $20.0 million, with cumulative accrued dividends totaling approximately $13,880,950 as of March 31, 2022[90] - Total stock-based compensation expense for Q1 2022 was $305,229, down from $380,263 in Q1 2021, with unrecognized compensation cost related to non-vested options and PSUs amounting to approximately $802,271[104] - The outstanding balance under the Credit Agreement was presented as a non-current liability as no principal is expected to be repaid in the next twelve months[86] Tax and Valuation - The effective income tax rate for the three months ended March 31, 2022, was approximately 27%, higher than the expected federal rate of 21% due to valuation allowances and non-taxable income[111] - The company has recorded a valuation allowance against certain deferred tax assets as of March 31, 2022, due to uncertainty regarding their realization[112] Business Expansion and Strategy - The company began marketing an unsecured consumer loan product in 2022, expanding its offerings to current customers and retailer partners[124] - The company’s online LTO platforms provide consumers access to durable goods, supporting expansion opportunities in the U.S. consumer e-commerce market[123] - The company anticipates substantial capital resources will be needed to support its growth[152] - The company believes liquidity needs for future growth can be met by cash flow from operations and additional borrowings against the Credit Agreement[173]