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. retail and e-commerce markets.

• Utilizes a proprietary LTO Engine to automate underwriting and transaction processing across direct-to-consumer and retail partner channels.

• Offers brand-name durable goods through its online marketplace and partners with major retailers for point-of-sale LTO solutions.

• Holds multiple patents on LTO technology and has initiated patent infringement lawsuits against competitors.

Financial performance and metrics

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

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

• Outstanding balance under the primary credit facility was $131.4 million at September 30, 2024, with a 14.21% interest rate.

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

Use of proceeds and capital allocation

• Proceeds will fund the repurchase of series 2 convertible preferred stock at a discount, reducing preferred stock dividend and potential dilution.

• Additional proceeds will reduce outstanding debt under the 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 preferred stock repurchase and debt reduction.