BOCA RATON, Fla., Aug. 06, 2018 (GLOBE NEWSWIRE) -- FlexShopper, Inc. (Nasdaq:FPAY) (“FlexShopper”), a leading national online lease-to-own (“LTO”) retailer and LTO payment solution provider, today announced its financial results for the quarter ended June 30, 2018, highlighted by record second quarter revenue results.

Results for Three Months Ended June 30, 2018 vs. Three Months Ended June 30, 2017:

-- Total revenues increased 14.3% from $16.7 million to $19.1 million -- Lease originations increased from 16,722 to 23,488 or 40% -- Net loss increased to $2.0 million compared to a net loss of $1.6 million -- Net loss attributable to common shareholders increased to $2.6 million or $0.48 per diluted share compared to $2.1 million or $.40 per diluted share

Results for Six Months Ended June 30, 2018 vs. Six Months Ended June 30, 2017:

-- Total revenues increased 14.4% from $34.1 million to $39.0 million -- Lease originations increased from 35,238 to 45,559 or 29% -- Net loss increased to $4.3 million compared to a net loss of $2.6 million -- Net loss attributable to common shareholders increased to $5.5 million or $1.03 per diluted share compared to $3.7 million or $0.70 per diluted share -- Adjusted Gross Profit¹ increased 13.5% from $7.3 million to $8.3 million -- Adjusted EBITDA¹ was ($1.3) million compared to ($0.7) million

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

Other Highlights and Recent Developments

-- Company launched its largest retail rollout to 726 retail stores, accelerating its B2B2C business. -- Received a Notice of Allowance from the United States Patent and Trademark Office (USPTO) for its patent application directed to a system that enables e-commerce servers the ability to complete LTO transactions through their e-commerce websites. -- Launched jewelry on FlexShopper.com featuring a selection of 30,000 items from Overstock; we believe this could be a significant growth opportunity.

Brad Bernstein, CEO, stated, “We are pleased to report another quarter of continued revenue growth and achieving significant milestones, including our largest national retail rollout encompassing 726 locations. The retail rollout has been executed quickly and seamlessly utilizing our mobile application that requires no integration into the retailer’s point of sale system. With this rollout we are excited to see our B2B2C business accelerate. We anticipate additional retail adoption with this “integrationless” methodology. In addition, our online B2C business remains strong, posting 40.5% lease origination growth for the quarter. Much of this growth is attributable to our digital marketing channel which we continue to expand with its increasing efficiency. Lastly, in connection to our LTO Payment Method at checkout on e-commerce websites, we received a notice of allowance from the United States Patent and Trademark Office (USPTO) for our patent application directed to a system that enables e-commerce servers the ability to complete LTO transactions through their e-commerce websites. We believe this patent will constitute a significant differentiator for us in the LTO industry.”

We are exploring various financing options to provide additional equity capital to continue to grow our business. For further information, please refer to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 6, 2018.

Conference Call Details

Date: Tuesday, August 7, 2018 Time: 3:00 p.m. Eastern Time Participant Dial-In Numbers: Domestic callers: (877) 407-3944 International callers: (412) 902-0038

Access by WebcastThe call will also be simultaneously webcast over the Internet via the “Investor” section of the Company’s website at www.flexshopper.com or by clicking on the conference call link: http://flexshopper.equisolvewebcast.com/q2-2018. An audio replay of the call will be archived on the Company’s website.

FLEXSHOPPER, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the three months ended For the six months ended June 30, June 30, ---------------------------- ---------------------------- 2018 2017 2018 2017 ------------ ------------ ------------ ------------ Revenues: Lease revenues and fees $ 18,588,477 $ 16,363,033 $ 37,925,373 $ 33,313,925 Lease merchandise sold 487,830 324,227 1,102,348 814,952 - ---------- - ---------- - ---------- - ---------- Total revenues 19,076,307 16,687,260 39,027,721 34,128,877 - ---------- - ---------- - ---------- - ---------- Costs and expenses: Cost of lease revenues, consisting of depreciation and impairment of lease 8,987,412 8,126,839 19,395,158 16,587,622 merchandise Cost of lease merchandise sold 324,705 226,310 658,468 535,928 Provision for doubtful accounts 5,483,487 4,759,879 10,658,805 9,675,629 Marketing 1,260,237 818,609 2,429,187 1,630,791 Salaries and benefits 2,031,788 1,898,005 4,211,164 3,666,157 Operating expenses 1,918,246 1,869,317 3,957,184 3,542,969 - ---------- - ---------- - ---------- - ---------- Total costs and expenses 20,005,875 17,698,959 41,309,966 35,639,096 - ---------- - ---------- - ---------- - ---------- Operating loss (929,568 ) (1,011,699 ) (2,282,245 ) (1,510,219 ) Interest expense including amortization of 1,045,338 551,304 1,979,005 1,107,295 debt issuance costs Net loss (1,974,906 ) (1,563,003 ) (4,261,250 ) (2,617,514 ) Dividends on Series 2 Convertible Preferred 604,824 560,236 1,208,504 1,109,036 Shares - ---------- - ---------- - ---------- - ---------- Net loss attributable to common shareholders $ (2,579,730 ) (2,123,239 ) (5,469,754 ) (3,726,550 ) - ---------- - ---------- - ---------- - ---------- Basic and diluted (loss) per common share: Net loss $ (0.48 ) $ (0.40 ) $ (1.03 ) $ (0.70 ) - ---------- - ---------- - ---------- - ---------- WEIGHTED AVERAGE COMMON SHARES: Basic and diluted 5,368,390 5,290,670 5,331,445 5,288,975 - ---------- - ---------- - ---------- - ----------

FLEXSHOPPER, INC. CONSOLIDATED BALANCE SHEETS June 30, December 31, 2018 2017 ------------- ------------- (unaudited) ASSETS CURRENT ASSETS: Cash $ 2,055,948 $ 4,968,915 Accounts receivable, net 4,104,683 4,259,468 Prepaid expenses 382,758 321,035 Lease merchandise, net 17,806,583 21,415,322 - ----------- - ----------- Total current assets 24,349,972 30,964,740 PROPERTY AND EQUIPMENT, net 3,073,049 2,948,164 94,185 95,722 OTHER ASSETS, net - ----------- - ----------- $ 27,517,206 $ 34,008,626 - ----------- - ----------- LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of loan payable under credit agreement to beneficial shareholder net of $449,226 at 2018 and $118,404 at 2017 of unamortized $ 14,402,123 $ 14,094,096 issuance costs Accounts payable 4,513,971 7,702,145 Accrued payroll and related taxes 365,514 404,346 Promissory notes 3,500,000 - Accrued expenses 767,921 786,095 - ----------- - ----------- Total current liabilities 23,549,529 22,986,682 Loan payable under credit agreement to beneficial shareholder net of $40,839 at June 30, 2018 and $39,468 at Dec 31, 2017 of unamortized issuance costs 1,309,284 4,698,032 and current portion - ----------- - ----------- Total liabilities 24,858,813 27,684,714 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 547 529 outstanding 5,469,501 shares as of 2018 and 5,294,501 as of 2017 Additional paid in capital 23,041,404 22,445,691 Accumulated deficit (43,532,583 ) (39,271,333 ) - ----------- - ----------- Total stockholders’ equity 2,658,393 6,323,912 - ----------- - ----------- $ 27,517,206 $ 34,008,626 - ----------- - -----------

FLEXSHOPPER, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months ended June 30, 2018 and 2017 (unaudited) 2018 2017 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (4,261,250 ) $ (2,617,514 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and impairment of lease merchandise 19,395,158 16,587,622 Other depreciation and amortization 1,191,510 1,002,644 Compensation expense related to issuance of stock options 72,481 42,211 Provision for doubtful accounts 10,658,805 9,675,629 Changes in operating assets and liabilities: Accounts receivable (10,504,020 ) (9,885,543 ) Prepaid expenses and other (60,167 ) (110,749 ) Lease merchandise (15,786,419 ) (11,532,939 ) Security deposits - (5,928 ) Accounts payable (3,188,174 ) (1,337,021 ) Accrued payroll and related taxes (38,832 ) (25,312 ) Accrued expenses 108,198 80,570 Net cash (used in) provided by operating activities (2,412,710 ) 1,873,670 - ----------- - ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment, including capitalized software costs (1,021,551 ) (979,562 ) - ----------- - ----------- Net cash (used in) investing activities (1,021,551 ) (979,562 ) - ----------- - ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from exercise of stock options - 15,000 Proceeds from exercise of warrants 1,750 - Proceeds from promissory notes 3,465,000 - Proceeds from loan payable under credit agreement 3,550,000 - Repayment of loan payable under credit agreement (6,420,852 ) (788,207 ) Repayment of installment loan (5,604 ) - Debt issuance related costs (69,000 ) - - ----------- - ----------- Net cash provided by (used in) financing activities 521,294 (773,207 ) - ----------- - ----------- (DECREASE)/INCREASE IN CASH (2,912,967 ) 120,901 CASH, beginning of period 4,968,915 5,412,495 - ----------- - ----------- CASH, end of period $ 2,055,948 $ 5,533,396 - ----------- - -----------

Non-GAAP MeasuresWe 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.

Six Months ended June 30, Adjusted Gross Profit 2018 2017 $ Change % Change Net revenues $ 39,027,721 $ 34,128,877 $ 4,898,844 14.4 Less: provision for doubtful accounts 10,658,805 9,675,629 983,176 10.2 Cost of merchandise sold 658,468 535,928 122,540 22.9 Adjusted net revenues 27,710,448 23,917,320 3,793,128 15.9 Less: Cost of lease revenue and merchandise sold 19,395,158 16,587,622 2,807,536 16.9 Adjusted gross profit $ 8,315,290 $ 7,329,698 $ 985,592 13.5 Net revenues as a percentage of cost of lease revenue 143 % 144 %

Six Months ended June 30, Adjusted EBITDA 2018 2017 $ Change % Change Net Loss $ (4,261,250 ) $ (2,617,514 ) $ 1,643,736 (62.8 ) Add back: depreciation (excluding leased inventory), amortization, interest and stock-based compensation 2,949,690 1,915,341 1,034,349 54.0 Adjusted EBITDA $ (1,311,560 ) $ (702,173 ) $ 609,387 (86.8 )

We refer to Adjusted Gross Profit and Adjusted EBITDA in the above tables as we use these measures to evaluate our 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 our industry in assessing performance.

Adjusted Gross Profit represents GAAP revenue less the provision for doubtful accounts and cost of leased inventory and inventory sold. Adjusted Gross Profit provides us with an understanding of the results from the primary operations of our business. We use Adjusted Gross Profit to evaluate our period-over-period operating performance. This measure may be useful to an investor in evaluating the underlying operating performance of our 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 FlexShopper, Inc.