BOCA RATON, Florida, January 13, 2025 (GLOBE NEWSWIRE) — FlexShopper, Inc. (Nasdaq:NASDAQ:)a leading national online rent-to-own retailer and payment solutions provider, today announced the preliminary results of its previously disclosed unitary rights offering (the Rights Offering), which expired at 5:00 p.m. ET on the 10th January 2025 (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 under the Rights Offering. Units sold at $1.70 were at a 15% discount to the 3-day volume-weighted average price and included one share and 3 additional rights to purchase shares at a discount to the trading price .
Preliminary products
According 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 common stock of the Company. Through the initial portion of the rights offering, FlexShopper raised $9.4 million in gross proceeds. There are 21 million additional rights that can be exercised over the next 90 days at 30-day intervals for additional shares.
I would like to thank all of my fellow shareholders who have subscribed to our subscription rights for their continued support, trust and, most importantly, their confidence 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 third quarter of 2024, our stock closed at $1.03 per share, representing a market capitalization of $22.1 million, compared to FlexShopper’s January 10, 2025 closing stock price of $1.90 per share, representing a market capitalization of over $54 million. We believe this appreciation reflects the accretive nature of the use of proceeds from the rights offering, as well as the increasing strength of our financial and operating results.
Mr. Heiser continued: Shareholders who 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 which will expire in the next 30, 60 and 90 days, respectively. . The same level of participation in 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 dividends and interest debtors.
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 a portion of its outstanding credit facility and other debt facilities . Any remaining proceeds will be used for general corporate purposes, including potential acquisitions of other companies. The shares subscribed for under the Subscription Rights are expected to be issued to participating shareholders on or about January 15, 2025.
Conversion of subordinated debts
NRNS Capital Holdings LLC (NRNS), whose manager is FlexShopper’s chairman, has elected to convert $2.5 million of the $10.75 million debt capital outstanding as of September 30 2024 as part of the rights offering. As of September 30, 2024, the amounts in circulation under the NRNS note bear interest at the rate of 19.21%. With the partial conversion of NRNS subordinated debt, the pro forma outstanding balance is $8.25 million. FlexShopper estimates it will save approximately $0.5 million in annual interest costs through the conversion.
Mr. Heiser concluded: I am excited about the direction FlexShopper is taking as we increase our market share and execute on our growth-focused strategic plan. Equalizing our balance sheet represents a tremendous opportunity to increase profits for our shareholders. I look forward to providing additional updates on our successes in the coming months.
FlexShopper encourages Series A, B and C rights holders to contact the securities trading department of their broker or financial advisor to participate in these subsequent rights. Information about the rights offerings is available at https://www.sec.gov and https://investors.flexshopper.com.
The offering was made pursuant to the Company’s registration statement on Form S-1 (File No. 333-282857), which was declared effective by the United States Securities and Exchange Commission on November 29, 2024. The 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 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 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 payment options to consumers. FlexShopper offers a variety of flexible financing options to underserved consumers through its direct-to-consumer online marketplace at flexshopper.com and in partnership with merchant partners both online and in physical stores. FlexShopper’s solutions are designed to meet the needs of a wide range of consumer segments through leasing and lending products.
Forward-looking statements
Any statements contained in this 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 terms such as believe, expect, may, will, should, could, seek, have intention, plan, objective, estimate, anticipate or other comparable terms. Examples of forward-looking statements include, among others, statements we make regarding expectations regarding lease origination, expansion of our rent-to-own program; expectations regarding our partnerships with our retail partners; investments in and success of our underwriting technology and risk analytics platform; our ability to collect payments due from customers; expected future operating 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 indicated in the forward-looking statements, due to various factors, including the following: our ability to obtain adequate financing to finance our business . upcoming operations; failure to successfully operate and develop our FlexShopper.com e-commerce platform; our ability to maintain compliance with financial covenants under our credit agreement; our dependence on and ongoing relationships with our third-party retail partners; our compliance with various federal, state and local laws and regulations, including those related to consumer protection; failure to protect the integrity and security of customer and employee information; and other risks and uncertainties described in the Risk Factors and Management’s Discussion and Analysis sections of our Annual Report on Form 10-K and subsequently filed in the 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 undertakes no obligation to update these forward-looking statements to reflect actual results or changes in expectations, except as required by law. requires otherwise.
Company contact:
FlexShopper, Inc.
Investor Relations
ir@flexshopper.com
Investor and media contact
André Berger
General manager
SM Berger & Company, Inc.
Such. (216) 464-6400
andrew@smberger.com
Source: FlexShopper, Inc.
