FlexShopper publishes preliminary results of subscription rights to units offered by Investing.com

BOCA RATON, Fla., Jan. 13, 2025 (GLOBE NEWSWIRE) — FlexShopper, Inc. (Nasdaq: NASDAQ:)a prominent national online retailer and payment solutions provider, today announced the preliminary results of its previously announced unit rights offering (the Rights Offering), which expired at 5:00 p.m. ET on January 10, 2025 (the Expiration Date). The Company also announced that the holder of the Company’s subordinated debt has decided to convert 25%, or $2.5 million, of the outstanding principal amount into the Rights Offering. The units sold at $1.70 were at a 15% discount to the three-day volume weighted average price and included a share and 3 additional rights to purchase shares at a discount to the trading price.

Preliminary income
According to Continental Stock Transfer & Trust Company (Subscription Agent), as of the Expiration Date, approximately 5,547,993 subscription rights (“Subscription Rights”) have been exercised to purchase approximately 21% of the Company’s common stock. Through the initial 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 my fellow shareholders who have subscribed to our subscription rights for their continued support, trust and above all confidence in FlexShopper, said Russ Heiser, CEO of FlexShopper. A rights offering is an efficient, shareholder-friendly method of raising capital. At the end of the third quarter of 2024, our stock closed at $1.03 per share, representing a market capitalization of $22.1 million, compared to FlexShopper’s closing stock price on January 10, 2025 of $1.90 per share, which represents a market capitalization of over USD 54 million. We believe this increase reflects the growing nature of the use of proceeds by the Rights Offering, as well as the increasing strength of our financial and operating results.

Mr. Heiser continued: Stockholders who participated in the subscription rights now have access to additional opportunities to increase their investment in FlexShopper through 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 more than 90% of its series 2 convertible preferred shares, and to repay part of its credit line and other outstanding debts. 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 shareholders on or about January 15, 2025.

Conversion of subordinated debt
NRNS Capital Holdings LLC (NRNS), whose manager is the chairman of FlexShopper’s board of directors, has decided to convert $2.5 million of the $10.75 million outstanding principal amount of debt as of September 30, 2024 into a Rights Offering. As of September 30, 2024, amounts outstanding under the NRNS Note bear interest at a rate of 19.21%. With the partial conversion of NRNS subordinated debt, the pro forma outstanding amount is $8.25 million. FlexShopper estimates it will save approximately $0.5 million in annual interest as a result of the conversion.

Mr. Heiser concluded, I am excited about the direction FlexShopper is headed as we increase our market share and execute on our growth-focused strategic plan. Equitization of our balance sheet is a powerful opportunity to increase earnings for our shareholders. I look forward to providing additional updates on our success in the coming months.

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

The offering is made pursuant to the corporation’s registration statement on Form S-1 (File No. 333-282857), which has been declared effective by the U.S. Securities and Exchange Commission on November 29, 2024. Prospectus relating to and describing the terms of the rights offering was filed with the SEC on December 2, 2024 and is available on the SEC’s website at www.sec.gov. This announcement will not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of such securities in any state where such offer, solicitation or sale would be illegal prior to 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 providing consumer payment options. FlexShopper provides a variety of flexible financing options for underserved consumers through its direct-to-consumer online marketplace at flexshopper.com and in partnership with merchant partners, both online and in physical locations. FlexShopper’s solutions are designed to meet the needs of a wide range of consumer segments through rent-to-own and lending products.

Forward-looking statements
All statements in this news release that are not based on historical facts 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 expressions such as believe, expect, might, will, should would, could, seek, intend, plan, aim, estimate, anticipate or other comparable terms. Examples of forward-looking statements include, among other things, statements we make regarding expectations of lease origination, the expansion of our lease-to-own program; expectations regarding our partnership with retail partners; investments in the success of our risk underwriting technology and risk analytics platform; our ability to collect amounts due from customers; expected future business results and expectations regarding our business strategy. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements as a result of various factors including, but not limited to, the following: our ability to obtain adequate financing to fund our business future operations; failure to successfully operate and develop our FlexShopper.com e-commerce platform; our ability to maintain compliance with the financial covenants under our credit agreement; our dependence on the success of our third-party retail partners and our continuing relationships with them; our compliance with various federal, state and local laws and regulations, including those relating to consumer protection; failure to protect the integrity and security of customer and employee data; and other risks and uncertainties described in Risk Factors and in the 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. Forward-looking statements made in this release speak only as of the date of this release, and FlexShopper undertakes no obligation to update such forward-looking statements to reflect actual results or changes in expectations, except as otherwise required by law.

Company contact:
FlexShopper, Inc.
Investor relations
ir@flexshopper.com

Contact for investors and media
Andrew Berger
general manager
SM Berger & Company, Inc.
Phone (216) 464-6400
andrew@smberger.com

Source: FlexShopper, Inc.