Flexshopper (FPAY) Registration Filing summary

Company overview and business model

• Operates as a financial technology company offering lease-to-own (LTO) and financing options to credit-constrained, near and subprime consumers, primarily in the U.S.

• Provides LTO programs for durable goods via its e-commerce marketplace and through partnerships with traditional and online retailers.

• Utilizes proprietary technology and risk analytics for instant underwriting and automated lease origination.

• Recent strategic changes include sourcing goods at discounts and expanding third-party financing options to increase conversion rates.

• Holds patents on key LTO technologies and has filed lawsuits against competitors for patent infringement.

Financial performance and metrics

• Generated approximately $132 million in gross lease revenues and fees for the year ended December 31, 2023.

• As of June 30, 2024, 42% of originations were from repeat customers.

• Federal and state net operating loss carryforwards as of December 31, 2023, were $72.7 million and $21.8 million, respectively.

• Outstanding balance under the credit agreement was $117.5 million as of June 30, 2024, with a 14.44% interest rate.

Use of proceeds and capital allocation

• Proceeds will fund the repurchase of series 2 convertible preferred stock at a discount, reduce outstanding debt under a credit facility, finance potential acquisitions, and support working capital and general corporate purposes.

• If less than $20 million is raised, priority will be given to the preferred stock repurchase and debt reduction.

• Any additional proceeds from the exercise of Series Rights will further reduce debt and support acquisitions and general purposes.