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FlexShopper, Inc. Reports 2024 Fourth-Quarter and Year-End Financial Results

1. FlexShopper's revenue grew 19.5% year-over-year in 2024. 2. Operating income jumped 66% to $22.8 million, bolstered by LTO strategies. 3. Lease funding approvals increased 79.3% to $382.8 million in 2024. 4. FlexShopper expects continued growth with adjusted EBITDA forecasted to rise 20-35%. 5. Nasdaq compliance issue noted, but listing remains unaffected temporarily.

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Why Bullish?

Strong revenue and profit growth indicate a healthy financial trajectory, similar to past momentum following major product launches.

How important is it?

The detail about revenue growth and profitability suggests strong operational performance, impacting investor sentiment positive for FPAY.

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Immediate effects from financial results can shape market perceptions quickly, historically evidenced by similar quick upticks after quarterly results.

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FLEXCASHLOAN
Ongoing DTC and B2B growth strategies drove a 19.5% year-over-year increase in annual revenue Operating income for 2024 increased 66% to $22.8 million, and adjusted EBITDA increased 43.1% to $33.3 million, as a result of higher revenue, controlled expenses and favorable asset quality BOCA RATON, Fla., April 23, 2025 (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 unaudited financial results for the quarter and full year ended December 31, 2024. Russ Heiser, Jr, Chief Executive Officer, stated, “As expected, 2024 was a transformative year for FlexShopper highlighting the successful technology investments we made over the past two years and the progress of our DTC and B2B growth strategies. During 2024, we grew our market share and expanded FlexShopper’s LTO offerings to 7,900 locations, a ~250% increase. In addition, 2024 was the first year of our retail revenue strategy on our flexshopper.com marketplace, which added incremental revenues and profits to our model. The success of our growth strategies generated $22.8 million of operating income, a 66% year-over-year increase. “We pursued opportunities that leverage our expanding financial performance to improve our balance sheet. This included raising $12.2 million in proceeds since the beginning of November 2024 through the beginning of 2025 through our previously mentioned rights offering. We continue to look for strategic opportunities to repurchase 91% of our series 2 convertible preferred stock at a 50+% discount to its liquidation preference, which we believe will be highly accretive to FlexShopper’s common shareholders,” Mr. Heiser continued. “We expect our growth strategies to continue to drive positive momentum in 2025, and for the first quarter of 2025, lease originations increased 49.7%, relative to the same period in 2024. In addition, we believe profitability will improve further in 2025 as we benefit from higher sales on flexshopper.com, stable operating expenses and credit quality, and the contribution of payments on leases that were originated in 2024,” concluded Mr. Heiser. Results for the Fourth Quarter Ended December 31, 2024(1) vs. the Fourth Quarter Ended December 31, 2023 (unaudited): Total lease funding approvals increased 65.6% to $142.4 million from $86 millionTotal revenues increased 17.3% to $35.5 million from $30.3 millionGross profit increased 29.8% to $20.4 million from $15.7 millionGross profit margin increased from 52% to 58%Operating income of $5.8 million, compared with operating income of $5.6 millionAdjusted EBITDA(2) increased by 5.7% to $8.6 million from $8.2 millionNet loss attributable to common stockholders of ($1.9) million, or ($0.09) per diluted share, compared to net loss attributable to common stockholders of ($715) thousand or ($0.03) per diluted share Results for the Twelve Months Ended December 31, 2024(1) vs. the Twelve Months Ended December 31, 2023 (unaudited): Total lease funding approvals increased 79.3 % to $382.8 million from $213.5 millionTotal revenues increased 19.5% to $139.8 million from $117.0 millionGross profit increased 40.3% to $76.7 million from $54.7 millionGross profit margin increased from 47% to 55%Operating income of $22.8 million, compared with operating income of $13.7 millionAdjusted EBITDA(2) increased 43.1% to $33.3 million, compared to $23.2 millionNet loss attributable to common stockholders of ($4.7) million, or ($0.22) per diluted share, compared to net loss attributable to common stockholders of ($8.3) million, or ($0.38) per diluted share (1)  FlexShopper’s independent auditor, Grant Thornton LLP, is still in the process of finalizing the review of management’s position on the lease classification of the lease portfolio and whether it meets the definition of an operating lease.  Management believes that, regardless of Grant Thorton LLP’s determination regarding this classification, there will be no material impact to FlexShopper’s gross profit or net loss. (2) Adjusted EBITDA is a non-GAAP financial measure. Refer to the definition and reconciliation of this measure under “Non-GAAP Measures”. 2025 Forward GuidanceFlexShopper remains committed to executing its strategic plan, which centers on scaling its lease and loan business while maintaining strong asset performance and capitalizing on the growing opportunity within the online retail space. This strategy has already begun to deliver meaningful results. Throughout 2024, FlexShopper achieved consistent year-over-year revenue growth, driven by improving asset quality and a reduction in bad debt. Additionally, FlexShopper enhanced product margins, which has had a material positive impact on its income statement. FlexShopper is also realizing operating leverage across both marketing and general expenses, contributing to improved overall efficiency. As a result of these disciplined efforts, the company generated significant year-over-year EBITDA growth in 2024. Building on this momentum, FlexShopper anticipates continued progress in 2025, with the following performance expectations: 2025 full year gross profit between $90 million and $100 million which is a 17% to 30% increase from 20242025 full year adjusted EBITDA of $40 million to $45 million which is a 20% to 35% increase from 2024 10-K Filing and Nasdaq ComplianceFlexShopper plans to issue audited financial results as soon as it receives approval from Grant Thorton LLP. As a result of the delay in the audit, the Company received a notification from Nasdaq on April 17, 2025 that it is no longer in compliance with Nasdaq’s listing rules. The Company intends to file the Form 10-K as soon as practicable and, if necessary, to submit a plan with Nasdaq to regain compliance. If Nasdaq accepts the Company's plan, then Nasdaq may, at its discretion, grant the Company up to 180 days from the prescribed due date for filing the Form 10-K, or until October 13, 2025, to regain compliance.   This notification has no immediate effect on the listing of the Company's common stock on Nasdaq.   About FlexShopperFlexShopper, Inc. is a leading national financial technology company that offers innovative payment options to consumers. FlexShopper provides a variety of flexible funding options for underserved consumers through its direct-to-consumer online marketplace at Flexshopper.com and in partnership with merchants both online and at brick-and-mortar locations. FlexShopper’s solutions are crafted to meet the needs of a wide range of consumer segments through lease-to-own and lending products. Forward-Looking Statements The consolidated financial statements and related information contained in this press release for the year ended December 31, 2023, are audited. For the year ended December 31, 2024, they are unaudited and, although we believe they accurately reflect the values of each item, no assurance thereof can be given, or that our independent auditor may not adjust one or more of such values to be set forth in our completed 2024 audited consolidated financial statements. Grant Thornton LLP has not audited or reviewed, in accordance with standards established by the American Institute of Certified Public Accountants, any of the 2024 financial or other information contained in this press release. 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.CONSOLIDATED BALANCE SHEETS(unaudited) December 31,2024 December 31,2023    ASSETS   CURRENT ASSETS:   Cash$10,402,637  $4,413,130 Lease receivables, net 72,191,028   44,795,090 Loan receivables at fair value 54,330,006   35,794,290 Prepaid expenses and other assets 4,433,570   3,300,677 Lease merchandise, net 29,358,305   29,131,440 Total current assets 170,715,546   117,434,627     Property and equipment, net 9,692,396   9,308,859 Right of use asset, net 1,042,954   1,237,010 Intangible assets, net 12,259,413   13,391,305 Other assets, net 2,589,533   2,175,215 Deferred tax asset, net 13,208,652   12,943,361 Total assets$209,508,494  $156,490,377     LIABILITIES AND STOCKHOLDERS’ EQUITY   CURRENT LIABILITIES:   Accounts payable$5,589,866  $7,139,848 Accrued payroll and related taxes 467,596   578,197 Promissory notes to related parties, including accrued interest, and net of unamortized issuance costs of $191,163 at December 31, 2024 10,730,853   198,624 Accrued expenses 6,955,810   3,972,397 Lease liability - current portion 287,412   245,052 Total current liabilities 24,031,537   12,134,118 Loan payable under credit agreement to beneficial shareholder, net of unamortized issuance costs of $1,007,182 at December 31, 2024 and $70,780 at December 31, 2023 143,934,508   96,384,220 Promissory notes to related parties, net of unamortized issuance costs of $649,953 at December 31, 2023 and net of current portion —   10,100,047 Loan payable under Basepoint credit agreement, net of unamortized issuance costs of $54,496 at December 31, 2024 and $92,963 at December 31, 2023 7,358,109   7,319,641 Lease liabilities, net of current portion 1,034,166   1,321,578 Total liabilities 176,358,320   127,259,604     STOCKHOLDERS’ EQUITY   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 100,000,000 shares at December 31, 2024 and 40,000,000 shares at December 31, 2023, issued 25,138,251 shares at December 31, 2024 and 21,752,304 shares at December 31, 2023 2,515   2,176 Treasury shares, at cost- 527,222 shares at December 31, 2024 and 164,029 shares at December 31, 2023 (563,991)  (166,757)Additional paid in capital 46,911,459   42,415,894 Accumulated deficit (36,003,469)  (35,824,200)Total stockholders’ equity 33,150,174   29,230,773  $209,508,494  $156,490,377          FLEXSHOPPER, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)  For the year endedDecember 31,  2024   2023 Revenues:   Lease revenues and fees, net$106,959,906  $91,943,729 Loan revenues and fees, net of changes in fair value 28,539,495   25,031,278 Retail revenue 4,301,331   - Total revenues 139,800,732   116,975,007     Costs and expenses:   Depreciation and impairment of lease merchandise 56,634,623   56,288,128 Loan origination costs and fees 3,063,012   6,007,598 Cost of retail revenue 3,383,704   - Marketing 8,571,696   7,620,795 Salaries and benefits 16,977,744   12,499,099 Operating expenses 28,391,424   24,547,729 Net change in fair value of promissory note related to acquisition -   (3,678,689)Total costs and expenses 117,022,203   103,284,660 Operating income 22,778,529   13,690,347 Interest expense including amortization of debt issuance costs (22,136,448)  (18,913,773)Income/ (loss) before income taxes 642,081   (5,223,426)Income taxes (expense)/ benefit (821,350)  989,809 Net loss (179,269)  (4,233,617)    Dividends on Series 2 Convertible Preferred Shares (4,514,001)  (4,103,638)Net loss attributable to common and Series 1 Convertible Preferred shareholders$(4,693,270) $(8,337,255)    Basic and diluted loss per common share:   Basic$(0.22) $(0.38)Diluted$(0.22) $(0.38)    WEIGHTED AVERAGE COMMON SHARES:   Basic 21,534,674   21,705,406 Diluted 21,534,674   21,705,406  FLEXSHOPPER, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSFor the years ended December 31, 2024 and 2023(unaudited)    2024   2023 CASH FLOWS FROM OPERATING ACTIVITIES:   Net loss$(179,269) $(4,233,617)Adjustments to reconcile net loss to net cash used in operating activities:   Depreciation and impairment of lease merchandise 56,634,623   56,288,128 Other depreciation and amortization 9,607,044   7,881,110 Amortization of debt issuance costs 1,166,302   571,538 Amortization of discount on the promissory note related to acquisition -   236,952 Compensation expense related to stock-based compensation 888,380   1,677,708 Provision for doubtful accounts 34,333,462   42,505,647 Deferred income tax (265,291)  (929,533)Net change in fair value of promissory note related to acquisition -   (3,678,689)Net changes in the fair value of loans receivables at fair value (17,046,488)  (10,217,854)Changes in operating assets and liabilities:   Lease receivables (61,729,400)  (51,760,694)Loans receivables at fair value (1,489,228)  7,356,068 Prepaid expenses and other assets (1,254,627)  177,169 Lease merchandise (56,861,488)  (53,869,127)Purchase consideration payable related to acquisition -   208,921 Promissory note related to acquisition -   283,266 Lease liabilities (46,395)  (30,268)Accounts payable (1,549,982)  627,905 Accrued payroll and related taxes (110,601)  267,377 Accrued expenses 2,956,805   (26,527)Net cash used in operating activities (34,946,153)  (6,664,520)    CASH FLOWS FROM INVESTING ACTIVITIES   Purchases of property and equipment, including capitalized software costs (6,728,218)  (6,335,276)Additions of intangible assets (643,080)  - Purchases of data costs (1,779,976)  (1,225,983)Net cash used in investing activities (9,151,274)  (7,561,259)    CASH FLOWS FROM FINANCING ACTIVITIES   Proceeds from loan payable under credit agreement 48,486,690   18,050,000 Repayment of loan payable under credit agreement -   (2,795,000)Repayment of promissory notes to related parties -   (1,000,000)Repayment of loan payable under Basepoint credit agreement -   (1,500,000)Debt issuance related costs (1,605,446)  (115,403)Proceeds from exercise of stock options -   1,185 Principal payment under finance lease obligation (4,601)  (8,465)Tax payments associated with equity-based compensation transactions (103,487)  - Proceeds from rights offering, net of transaction costs 3,711,012   - Purchase of treasury stock (397,234)  (166,757)Net cash provided by financing activities 50,086,934   12,465,560     INCREASE/ (DECREASE) IN CASH 5,989,507   (1,760,219)    CASH, beginning of period 4,413,130   6,173,349     CASH, end of period$10,402,637  $4,413,130     Supplemental cash flow information:   Interest paid$20,252,454  $17,337,292 Noncash investing and financing activities   Due date extension of warrants$-  $917,581          Non-GAAP Financial 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, 2024 and 2023 are as follows:   2024   2023  $ Change % ChangeGross Profit:       Gross lease billings and fees$140,887,693  $131,634,768  $9,252,925  7.0 Provision for doubtful accounts (34,333,462)  (42,505,647)  8,172,185  (19.2)Gain on sale of lease receivables 98,179   2,814,608   (2,716,429) (96.5)Lease placement collections 307,496   -   307,496  - Net lease billing and fees$106,959,906  $91,943,729  $15,016,177  16.3 Loan revenues and fees 11,493,007   14,813,424   (3,320,417) (22.4)Net changes in the fair value of loans receivable 17,046,488   10,217,854   6,828,634  66.8 Net loan revenues$28,539,495  $25,031,278  $3,508,217  14.0 Retail revenue 4,301,331   -   4,301,331  - Total revenues$139,800,732  $116,975,007  $22,825,725  19.5 Depreciation and impairment of lease merchandise (56,634,623)  (56,288,128)  (346,495) 0.6 Loans origination costs and fees (3,063,012)  (6,007,598)  2,944,586  (49.0)Cost of retail revenue (3,383,704)  -   (3,383,704) - Gross profit$76,719,393  $54,679,281  $22,423,816  40.3 Gross profit margin 55%   47%                2024   2023  $ Change % ChangeAdjusted EBITDA:       Net loss$(179,269) $(4,233,617) $4,054,348  (95.8)Income taxes expense/ (benefit) 821,350   (989,809)  1,811,159  (183.0)Amortization of debt issuance costs 1,166,302   571,538   594,764  104.1 Amortization of discount on the promissory note related to acquisition -   236,952   (236,952) (100.0)Other amortization and depreciation 9,607,044   7,881,110   1,725,934  21.9 Interest expense 20,970,146   18,105,282   2,864,864  15.8 Stock-based compensation 888,380   1,677,708   (789,328) (47.0)Adjusted EBITDA$33,273,953  $23,249,164  $10,024,789  43.1                 Key performance metrics for the three months ended December 31, 2024 and 2023 are as follows:  Three Months Ended December 31,      2024   2023  $ Change % ChangeGross Profit:       Gross lease billings and fees$34,534,844  $33,611,362  $923,482  2.7 Provision for doubtful accounts (8,959,977)  (10,381,697)  1,421,720  (13.7)Gain on sale of lease receivables 20,954   10,863   10,091  92.9 Lease placement collections 92,112   -   92,112  - Net lease billing and fees$25,687,933  $23,240,528  $2,447,405  10.5 Loan revenues and fees 2,965,564   3,070,646   (105,082) (3.4)Net changes in the fair value of loans receivable 5,881,114   3,959,575   1,921,359  48.5 Net loan revenues$8,846,678  $7,030,221  $1,816,457  25.8 Retail revenue 973,683   -   973,863  - Total revenues$35,508,474  $30,270,749  $5,237,725  17.3 Depreciation and impairment of lease merchandise (13,613,272)  (13,394,865)  (218,307) 1.6 Loans origination costs and fees (667,232)  (1,129,440)  462,208  (40.9)Cost of retail revenue (790,199)  -   (790,199) - Gross profit$20,437,771  $15,746,344  $4,691,427  29.8 Gross profit margin 58%   52%               Three Months Ended December 31,      2024   2023  $ Change % ChangeAdjusted EBITDA:       Net loss$(728,416) $354,152  ($1,082,568) (305.7)Income taxes expense/ (benefit) 605,800   195,438   410,362  210.0 Amortization of debt issuance costs 341,803   194,681   147,122  75.6 Amortization of discount on the promissory note related to acquisition -   59,238   (59,238) (100.0)Other amortization and depreciation 2,472,471   2,206,179   266,292  12.1 Interest expense 5,580,802   4,813,168   767,634  15.9 Stock-based compensation 359,460   341,341   18,119  5.3 Adjusted EBITDA$8,631,920  $8,164,197  $467,723  5.7                 The Company refers to Adjusted EBITDA in the above tables 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.

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