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FlexShopper Reports 2018 First Quarter Financial Results Highlighted by 26% Growth in Lease Originations and 14% Revenue Growth

May 14, 2018

BOCA RATON, Fla., May 14, 2018 (GLOBE NEWSWIRE) -- FlexShopper, Inc. (Nasdaq:FPAY) (“FlexShopper” or the “Company”), a leading national online lease-to-own (“LTO”) retailer and LTO payment solution provider, today announced its financial results for the three months ended March 31, 2018.

Financial Highlights for the Three Months Ended March 31, 2018 vs. Three Months Ended March 31, 2017:

-- Lease revenues increased 14% to $19.3 million from $17.0 million -- Lease origination dollars increased 26% to $9.2 million from $7.3 million -- Adjusted Gross Profit(1) increased 7.4% to $4.0 million from $3.8 million -- Adjusted EBITDA(1) was $(867,301) compared to $(104,394) -- Net loss increased to $2.3 million compared to a net loss of $1.1 million -- Net loss after dividends on Series 2 Convertible Preferred Shares increased to $2.9 million, or $0.55 per diluted share, compared to $1.6 million, or $0.30 per diluted share

(1)Adjusted Gross Profit and Adjusted EBITDA are non-GAAP financial measures. Refer to the definitions and reconciliations of these measures under “Non-GAAP Measures”.

Other Operating Highlights and Recent Developments

-- Expanded a business to business (“B2B”) retail relationship and launched in approximately 200 store locations with launches in an additional 100 locations expected in the next 30 days -- Hired a Vice President, Retail Partnerships with 22 years of experience in the B2B LTO “save the sale” space to continue B2B expansion

Management CommentaryBrad Bernstein, CEO, stated, “We continued our momentum in the first quarter as lease origination dollars increased by 26% from the first quarter of 2017. Lease revenues also increased by 14% to $19.3 million. Expenses increased, primarily from investments made in technology that occurred in the second half of 2017, but also in marketing to grow the portfolio while maintaining our targeted customer acquisition costs. The company continues to scale successfully in digital channels.”

Mr. Bernstein continued, “We are also pleased to report the expansion of a B2B retail relationship to approximately 300 stores. We are focused on maximizing the ‘save the sale’ opportunity for our retail partner and generating low cost lease originations for FlexShopper.”

FLEXSHOPPER, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the three months ended March 31, ---------------------------- 2018 2017 ------------ ------------ Revenues: Lease revenues and fees $ 19,336,896 $ 16,950,892 Lease merchandise sold 614,518 490,725 - ---------- - ---------- Net revenues 19,951,414 17,441,617 Costs and expenses: Cost of lease revenues, consisting of depreciation and impairment of lease 10,407,746 8,460,783 merchandise Cost of lease merchandise sold 333,763 309,618 Provision for doubtful accounts 5,175,318 4,915,750 Marketing 1,168,950 812,182 Salaries and benefits 2,179,376 1,768,152 Other operating expenses 2,038,938 1,673,652 - ---------- - ---------- Total costs and expenses 21,304,091 17,940,137 - ---------- - ---------- Operating loss (1,352,677 ) (498,520 ) - ---------- - ---------- Interest expense, including amortization of debt issuance costs 933,667 555,991 - ---------- - ---------- Net loss (2,286,344 ) (1,054,511 ) Cumulative dividends on Series 2 Convertible Preferred Shares 603,680 548,800 - ---------- - ---------- Net loss attributable to common shareholders $ (2,890,024 ) $ (1,603,311 ) - ---------- - ---------- Basic and diluted (loss) income per common share: Net loss $ (0.55 ) $ (0.30 ) - ---------- - ---------- Weighted average common shares outstanding: Basic and diluted 5,294,501 5,287,391 - ---------- - ----------

FLEXSHOPPER, INC. CONSOLIDATED BALANCE SHEETS March 31, December 31, ------------- ------------- 2018 2017 ------------- ------------- ASSETS (unaudited) CURRENT ASSETS: Cash $ 1,798,217 $ 4,968,915 Accounts receivable, net 3,774,605 4,259,468 Prepaid expenses 682,753 321,035 Lease merchandise, net 18,955,223 21,415,322 - ----------- - ----------- Total current assets 25,210,798 30,964,740 PROPERTY AND EQUIPMENT, net 2,820,599 2,948,164 OTHER ASSETS, net 94,953 95,722 - ----------- - ----------- $ 28,126,350 $ 34,008,626 - ----------- - ----------- LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of loan payable under credit agreement to beneficial shareholder net of $26,325 in 2018 and $118,404 in 2017 of unamortized $ 9,741,890 $ 14,094,096 issuance costs Accounts payable 4,997,164 7,702,145 Accrued payroll and related taxes 175,063 404,346 Promissory notes, net of $21,000 of unamortized issuance costs 3,479,000 - Accrued expenses 782,321 786,095 - ----------- - ----------- Total current liabilities 19,175,438 22,986,682 Loan payable under credit agreement to beneficial shareholder, net of $13,143 in 2018 and $39,468 in 2017 of unamortized issuance costs and 4,863,642 4,698,032 current portion - ----------- - ----------- Total liabilities 24,039,080 27,684,714 COMMITMENTS STOCKHOLDERS’ EQUITY Series 1 Convertible Preferred stock, $0.001 par value- authorized 250,000 1,197,025 1,197,025 shares, issued and outstanding 239,405 shares at $5.00 stated value Series 2 Convertible Preferred stock, $0.001 par value- authorized 25,000 21,952,000 21,952,000 shares, issued and outstanding 21,952 shares at $1,000 stated value Common stock, $0.0001 par value- authorized 15,000,000 shares, issued and 529 529 outstanding 5,294,501 shares Additional paid in capital 22,495,393 22,445,691 Accumulated deficit (41,557,677 ) (39,271,333 ) - ----------- - ----------- Total stockholders’ equity 4,087,270 6,323,912 - ----------- - ----------- $ 28,126,350 $ 34,008,626 - ----------- - -----------

FLEXSHOPPER, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the three months ended March 31, 2018 and 2017 (unaudited) 2018 2017 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,286,344 ) $ (1,054,511 ) Adjustments to reconcile net loss to net cash (used in) operating activities: Depreciation and impairment of lease merchandise 10,407,746 8,460,783 Other depreciation and amortization 568,078 489,641 Compensation expense related to issuance of stock options 49,702 22,890 Provision for doubtful accounts 5,175,318 4,915,750 Changes in operating assets and liabilities: Accounts receivable (4,690,455 ) (4,854,364 ) Prepaid expenses and other (361,178 ) (130,663 ) Lease merchandise (7,947,647 ) (6,025,515 ) Security deposits - (5,928 ) Accounts payable (2,704,980 ) (1,583,747 ) Accrued payroll and related taxes (229,283 ) (177,551 ) Accrued expenses (3,774 ) 145,982 - ---------- - ---------- Net cash (used in) provided by operating activities (2,023,358 ) 202,767 - ---------- - ---------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment, including capitalized software costs (307,340 ) (477,389 ) - ---------- - ---------- Net cash (used in) investing activities (307,340 ) (477,389 ) - ---------- - ---------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from promissory note 3,465,000 - Proceeds from loan payable under credit agreement 1,550,000 - Repayment of loan payable under credit agreement (5,855,000 ) - - ---------- - ---------- Net cash (used in) financing activities (840,000 ) - - ---------- - ---------- DECREASE IN CASH (3,170,698 ) (274,622 ) CASH, beginning of period 4,968,915 5,412,495 - ---------- - ---------- CASH, end of period $ 1,798,217 $ 5,137,873 - ---------- - ----------

Non-GAAP Measures

The Company regularly reviews a number of metrics, including the following key metrics, to evaluate its business, measure its performance, identify trends affecting its business, formulate financial projections and make strategic decisions.

Three months ended March 31, ----------------------------- Adjusted Gross Profit 2018 2017 $ Change % Change ------------- ------------ ----------- ----- Lease revenues and fees $ 19,336,896 $ 16,950,892 $ 2,386,004 14.0 Lease merchandise sold 614,518 490,725 123,793 25.2 Cost of merchandise sold (333,763 ) (309,618 ) 24,145 7.8 Provision for doubtful accounts (5,175,318 ) (4,915,750 ) 259,568 5.3 - ----------- - ---------- - --------- ---- Net revenues 14,442,333 12,216,249 2,226,084 18.2 Cost of lease revenues, consisting of depreciation and (10,407,746 ) (8,460,783 ) 1,946,963 23.0 impairment of lease merchandise - ----------- - ---------- - --------- ---- Adjusted Gross Profit $ 4,034,587 $ 3,755,466 $ 279,121 7.4 - ----------- - ---------- - --------- ---- Gross profit margin 28 % 31 % Net revenues as a percentage of cost of lease revenue 139 % 144 % - ----------- - ---------- - --------- ----

Three months ended March 31, ----------------------------- Adjusted EBITDA 2018 2017 $ Change % Change ------------ ------------ ----------- -------- Net loss $ (2,286,344 ) $ (1,054,511 ) $ 1,231,833 116.8 Amortization of debt costs 132,404 118,404 14,000 11.8 Other amortization and depreciation 435,674 371,236 64,438 17.3 Interest expense 801,263 437,587 363,676 83.1 Stock compensation 49,702 22,890 26,812 117.1 - ---------- - ---------- - --------- ------- Adjusted EBITDA $ (867,301 )* $ (104,394 )* $ 762,907 730.5 - ---------- - ---------- - --------- -------

* Represents loss

The Company refers to Adjusted Gross Profit and Adjusted EBITDA in the above tables as it uses these measures to evaluate its operating performance and make strategic decisions about the Company. Management believes that Adjusted Gross Profit and Adjusted EBITDA provide relevant and useful information which is widely used by analysts, investors and competitors in its industry in assessing performance.

Adjusted Gross Profit represents GAAP revenue less the provision for doubtful accounts and cost of leased inventory and inventory sold as a percentage of cost of lease revenues. Adjusted Gross Profit provides us with an understanding of the results from the primary operations of its business. The Company uses Adjusted Gross Profit to evaluate its period-over-period operating performance. This measure may be useful to an investor in evaluating the underlying operating performance of its business.

About FlexShopper FlexShopper, LLC, a wholly owned subsidiary of FlexShopper, Inc. ( FPAY ), is a financial and technology company that provides brand name electronics, home furnishings and other durable goods to consumers on a lease-to-own (LTO) basis through its e-commerce marketplace ( www.FlexShopper.com ) and patent pending LTO payment method. FlexShopper also provides LTO technology platforms to retailers and e-retailers to facilitate transactions with consumers that want to acquire their products, but do not have sufficient cash or credit. FlexShopper approves consumers utilizing its proprietary consumer screening model, collects from consumers under an LTO contract and funds the LTO transactions by paying merchants for the goods.

Forward-Looking StatementsAll 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 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 limited operating history, limited cash and history of losses; 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 file 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.

Contact:Jeremy HellmanSenior AssociateThe Equity Group212-836-9626jhellman@equityny.com

FlexShopper, Inc.Investor Relations ir@flexshopper.com

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