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FlexShopper Reports 2019 First Quarter Financial Results; Total Revenues Up 53.8% With Adjusted EBITDA of $2.3 Million and Net Income of $504,000

May 7, 2019

BOCA RATON, Fla., May 07, 2019 (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 quarter ended March 31, 2019, highlighted by continued revenue growth coupled with positive net income (before preferred stock dividend expense).

Results for Quarter Ended March 31, 2019 vs. Quarter Ended March 31, 20181:

-- Total revenues increased 53.8% from $14.8 million to $22.7 million, calculated on a basis consistent with the 2019 adoption of ASC 842 related to lease accounting -- FlexShopper originated 29,972 gross leases, up 36.0% from 22,035 -- Gross lease originations increased 54.7% from $9.1 million to $14.1 million -- Net income of $0.5 million, compared with net loss of ($2.3) million -- Net loss attributable to common stockholders declined to ($0.1) million, compared to ($2.9) million -- Gross Profit2 increased 70.7% from $4.0 million to $6.9 million -- Adjusted EBITDA2 was $2.3 million compared to ($0.9) million

1 Beginning with current period financial results, the Company has adopted a new accounting standard which requires revenues to be reported net of bad debt expense. The Company has retroactively adopted the provisions of the new accounting standard to prior periods in order to provide an accurate comparison.2 Gross Profit and Adjusted EBITDA are non-GAAP financial measures. Refer to the definitions and reconciliations of these measures under “Non-GAAP Measures”.

Q1 2019 Highlights and Recent Developments

-- Continued growth in originations.FlexShopper originated 29,972 gross leases in Q1 2019, representing a gain of 36.0% compared with the prior year period. Growth was driven by continued improvement in repeat customer activity along with strong growth in the Company’s B2B channel. -- Lease originations through third party retail stores, the Company’s B2B channel, grew 214.3% compared to the same period last year. In addition, retail store lease originations increased from 11.0% of total originations in the first quarter of 2018 to 26.4% of originations in the first quarter of 2019.

-- The Company’s average cost to acquire a new customer continued to decrease in the first quarter of 2019 to its lowest amount for any fiscal quarter at $93, compared to $154 for the same period in 2018. This decrease is the result of continued optimization of the Company’s marketing and underwriting strategies, combined with increased lease originations through retail partners. Leases acquired through the Company’s B2B retail channel have significantly lower acquisition costs than its direct to consumer, or B2C, channels. -- A retail store pilot has expanded to more than 400 stores.With this expansion and exclusive relationship, the Company’s “save the sale” LTO program is in over 1,100 stores nationwide. This rollout reaffirms the merits of the Company’s mobile LTO technology, which provides a quick and seamless process for retailers and consumers to transact on an LTO basis. -- Strong bottom line results shown by net income (before preferred dividends) exceeding $500,000. Driven by the combination of strong top line growth and operating expense control, the Company reported its first-ever profitable quarter with net income of approximately $504,000. Adjusted EBITDA was also positive at $2.3 million.

Brad Bernstein, CEO, stated, “The first quarter of 2019 truly marks an inflection point for FlexShopper as we reported the first profitable quarter in our history. This quarter reflects a combination of many factors coming together, including lease origination growth, continued repeat business, significant increases in our retail store, B2B business and cost controls. We are successfully fulfilling the company’s original vision of being the pure play, omnichannel virtual LTO Company. I am gratified to see the hard work of our team members and our company’s innovation to meet consumers’ and retailers’ needs, translate into the excellent bottom-line results we reported in Q1.”

2019 Outook

The Company is updating its guidance for 2019.

Current Guidance Previous Guidance ----------------------------- ---------------- ----------------- 2019 Gross Lease Originations > $70 million > $70 million ----------------------------- ---------------- ----------------- 2019 Gross Revenue > $110 million > $110 million ----------------------------- ---------------- ----------------- 2019 Gross Profit > $25.5 million > $25.0 million ----------------------------- ---------------- ----------------- 2019 Adjusted EBITDA > $4.0 million > $3.5 million ----------------------------- ---------------- -----------------

The Company’s guidance for Gross Lease Originations, Gross Revenue, Gross Profit and Adjusted EBITDA are forward-looking statements. They are subject to various risks and uncertainties that could cause the Company’s actual results to differ materially from the anticipated targets. There can be no assurance the Company will meet these financial projections. See the cautionary information about forward-looking statements in the “Forward-Looking Statements” section of this press release. Additionally, Gross Profit and Adjusted EBITDA are non-GAAP financial measures. Refer to the definitions of these measures under “Non-GAAP Measures,” but note that information reconciling forward-looking non-GAAP measures to GAAP measures is not available without unreasonable effort.

Conference Call Details Date: Wednesday, May 8, 2019 Time: 10:00 a.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: https://78449.themediaframe.com/dataconf/productusers/fpay/mediaframe/30251/indexl.html. 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 March 31, ---------------------------- 2019 2018 ------------ ------------ Revenues: Lease revenues and fees, net $ 21,784,779 $ 14,161,578 Lease merchandise sold 946,618 614,518 - ---------- - ---------- Total revenues 22,731,397 14,776,096 - ---------- - ---------- Costs and expenses: Cost of lease revenues, consisting of depreciation and impairment of lease 15,277,939 10,407,746 merchandise Cost of lease merchandise sold 565,007 333,763 Marketing 848,546 1,168,950 Salaries and benefits 1,758,087 2,179,376 Operating expenses 2,596,282 2,038,938 - ---------- - ---------- Total costs and expenses 21,045,861 16,128,773 - ---------- - ---------- Operating income/(loss) 1,685,536 (1,352,677 ) Interest expense including amortization of debt issuance costs 1,181,993 933,667 - ---------- - ---------- Net income/(loss) 503,543 (2,286,344 ) Dividends on Series 2 Convertible Preferred Shares 609,168 603,680 - ---------- - ---------- Net loss attributable to common shareholders $ (105,625 ) $ (2,890,024 ) - ---------- - ---------- Basic and diluted (loss) per common share: Net loss $ (0.01 ) $ (0.55 ) - ---------- - ---------- WEIGHTED AVERAGE COMMON SHARES: Basic and diluted 17,650,847 5,294,501 - ---------- - ----------

FLEXSHOPPER, INC.CONSOLIDATED BALANCE SHEETS

March 31, December 31, 2019 2018 ------------- ------------- (unaudited) ASSETS CURRENT ASSETS: Cash $ 2,647,056 $ 6,141,210 Accounts receivable, net 6,510,338 6,375,963 Prepaid expenses 335,484 317,160 Lease merchandise, net 28,181,941 32,364,697 - ----------- - ----------- Total current assets 37,674,819 45,199,030 PROPERTY AND EQUIPMENT, net 3,497,073 3,336,664 OTHER ASSETS, net 149,852 90,621 - ----------- - ----------- $ 41,321,744 $ 48,626,315 - ----------- - ----------- LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of loan payable under credit agreement to beneficial shareholder net of $222,526 at 2019 and $167,483 at 2018 of unamortized $ 18,372,922 $ 14,252,717 issuance costs Accounts payable 3,105,990 8,317,216 Accrued payroll and related taxes 195,530 393,095 Promissory notes to related parties net of $32,574 at 2019 and $0 at 2018 of 3,762,526 1,814,771 unamortized issuance costs Accrued expenses 1,012,131 1,335,505 Lease liability – current portion 94,249 - - ----------- - ----------- Total current liabilities 26,543,348 26,113,304 Loan payable under credit agreement to beneficial shareholder net of $54,869 at 2019 and $164,752 at 2018 of unamortized issuance costs and current 4,530,310 14,020,335 portion Promissory notes to related parties net of $22,001 at 2019 and $0 at 2018 of 1,164,789 - unamortized issuance costs and current portion Lease liabilities less current portion 37,202 - - ----------- - ----------- Total liabilities 32,275,649 40,133,639 STOCKHOLDERS’ EQUITY Series 1 Convertible Preferred Stock, $0.001 par value- authorized 250,000 shares, issued and outstanding 171,191 shares at 2019 and 239,405 shares at 855,955 1,197,025 $5.00 stated value at 2018 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 40,000,000 shares, issued and 1,767 1,758 outstanding: 17,666,193 shares at 2019 and 17,579,870 at 2018 Additional paid in capital 34,465,425 34,074,488 Accumulated deficit (48,229,052 ) (48,732,595 ) - ----------- - ----------- Total stockholders’ equity 9,046,095 8,492,676 - ----------- - ----------- $ 41,321,744 $ 48,626,315 - ----------- - -----------

FLEXSHOPPER, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSFor the three months ended March 31, 2019 and 2018(unaudited)

2019 2018 ------------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income/(loss) $ 503,543 $ (2,286,344 ) Adjustments to reconcile net income/(loss) to net cash provided by (used in) operating activities: Depreciation and impairment of lease merchandise 15,277,939 10,407,746 Other depreciation and amortization 584,968 568,078 Compensation expense related to issuance of stock options and warrants 36,729 49,702 Interest in kind added to promissory notes balance 167,119 - Provision for doubtful accounts 7,344,944 5,175,318 Changes in operating assets and liabilities: Accounts receivable (7,479,319 ) (4,690,455 ) Prepaid expenses and other (17,624 ) (361,718 ) Lease merchandise (11,095,183 ) (7,947,647 ) Security deposits (60,000 ) - Accounts payable (5,211,226 ) (2,704,981 ) Accrued payroll and related taxes (197,565 ) (229,283 ) Accrued expenses (320,979 ) (3,774 ) - ----------- - ---------- Net cash used in operating activities (466,654 ) (2,023,358 ) - ----------- - ---------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment, including capitalized software costs (553,184 ) (307,340 ) - ----------- - ---------- Net cash used in investing activities (553,184 ) (307,340 ) - ----------- - ---------- CASH FLOWS FROM FINANCING ACTIVITIES Refund of equity issuance related costs 13,147 - Proceeds from promissory notes, net of fees 2,940,000 3,465,000 Proceeds from loan payable under credit agreement 1,241,328 1,550,000 Repayment of loan payable under credit agreement (6,665,989 ) (5,855,000 ) Repayment of installment loan (2,802 ) - - ----------- - ---------- Net cash used in financing activities (2,474,316 ) (840,000 ) - ----------- - ---------- INCREASE/(DECREASE) IN CASH (3,494,154 ) (3,170,698 ) CASH, beginning of period 6,141,210 4,968,915 - ----------- - ---------- CASH, end of period $ 2,647,056 $ 1,798,217 - ----------- - ---------- Supplemental cash flow information: Interest paid $ 993,544 $ 754,276 Non-cash financing activities: Conversion of preferred stock to common stock $ 341,070 -

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.

Key performance metrics for the three months ended March 31, 2019 and 2018 are as follows:

Three months ended March 31, ------------------------------ 2019 2018 $ Change % Change ------------- ------------- ------------ ----- Gross Profit: Gross lease revenues and fees $ 29,129,723 $ 19,336,896 $ 9,792,827 50.6 Lease merchandise sold 946,618 614,518 332,100 54.0 - ----------- - ----------- - ---------- ---- Gross Revenue 30,076,341 19,951,414 10,124,927 50.8 Provision for doubtful accounts and revenue (7,344,944 ) (5,175,318 ) (2,169,626 ) 41.9 adjustments - ----------- - ----------- - ---------- ---- Net revenues 22,731,397 14,776,096 7,955,301 53.8 Cost of merchandise sold (565,007 ) (333,763 ) (231,244 ) 69.3 Cost of lease revenues, consisting of depreciation and (15,277,939 ) (10,407,746 ) (4,870,193 ) 46.8 impairment of lease merchandise - ----------- - ----------- - ---------- ---- Gross Profit $ 6,888,451 $ 4,034,587 $ 2,853,864 70.7 - ----------- - ----------- - ---------- ---- Gross profit margin 30 % 27 % - ----------- - -----------

Gross Profit represents GAAP revenue less the provision for doubtful accounts and cost of leased inventory and inventory sold. Gross Profit provides us with an understanding of the results from the primary operations of our business. We use 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.

Three months ended March 31, -------------------------- 2019 2018 $ Change % Change ----------- ------------ ----------- ------ Adjusted EBITDA: Net income/(loss) $ 503,543 $ (2,286,344 ) $ 2,789,887 - Amortization of debt costs 60,265 132,404 (72,139 ) (54.5 ) Other amortization and depreciation 524,703 435,674 89,029 20.4 Interest expense 1,121,728 801,263 320,465 40.0 Stock compensation 25,529 49,702 (24,173 ) (48.6 ) Non recurring product/infrastructure expenses 92,297 - 92,297 - - --------- - ---------- - --------- ----- Adjusted EBITDA $ 2,328,065 $ (867,301 )* $ 3,195,366 - - --------- - ---------- - --------- -----

Adjusted EBITDA represents net income before interest, stock-based compensation, taxes, depreciation (other than depreciation of leased inventory), amortization, and one-time or non-recurring items. We believe that Adjusted EBITDA provides us with an understanding of one aspect of earnings before the impact of investing and financing charges and income taxes.

The Company refers to Gross Profit and Adjusted EBITDA in the above tables as the Company uses these measures to evaluate operating performance and to make strategic decisions about the Company. Management believes that 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.

About FlexShopperFlexShopper, 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 ) as well as its patented and patent pending systems. 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. These statements include the Company’s financial guidance for fiscal year 2019. 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 expectations of lease originations during the holiday season, 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 filed 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.

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