FlexShopper Reveals Positive Results from Rights Offering
FlexShopper, Inc. (Nasdaq: FPAY), a leading player in the online lease-to-own retail and payment solutions sector, recently shared the preliminary results of its unit rights offering. This offering has created a buzz within the financial community, following its recent expiration.
Unit Rights Offering Insights
Upon conclusion, the Rights Offering saw approximately 5,547,993 subscription rights exercised, translating to around 21% of the Company’s common stock being purchased. This initiative raised gross proceeds of approximately $9.4 million, showcasing strong shareholder engagement and interest. FlexShopper's units were priced at $1.70, reflecting a 15% discount to the average stock price over a three-day trading period.
Future Shareholder Opportunities
Russ Heiser, the CEO of FlexShopper, expressed gratitude to the shareholders who participated, emphasizing the offering's efficient design which favors stockholders. As the Rights Offering has concluded, shareholders are now presented with new opportunities through upcoming Series A, B, and C rights. These initiatives are expected to generate up to $48 million if participation remains consistent.
Utilization of Proceeds
The financial resources acquired through this offering are aimed at enhancing the company’s capital structure. FlexShopper plans to repurchase a significant portion of its Series 2 Convertible Preferred Stock while also alleviating parts of its credit obligations. Any surplus funds will be allocated for general corporate purposes and potential acquisitions.
Conversion of Subordinated Debt
Significantly, NRNS Capital Holdings LLC, under the guidance of its chairman, has opted to convert $2.5 million of its subordinated debt as part of this capital effort. This strategic move will reduce the principal outstanding and benefit FlexShopper by cutting down annual interest costs.
Market Position and Growth Plan
Heiser highlighted the promising trajectory of FlexShopper's market share growth, stating that the firm's stock price has seen an impressive rise, mirroring its ambitious strategic goals. FlexShopper’s proactive approach in equitizing its balance sheet is expected to amplify earnings for its equity investors.
Active Participation Encouraged
FlexShopper urges holders of the newly available rights to engage their financial advisors about participating in this next round of rights offerings. This active bottom-up financial participation signifies a commitment and belief in the company's potential.
About FlexShopper
FlexShopper stands out as a reputable financial technology entity dedicated to offering flexible payment solutions to underserved consumer demographics. This is achieved through its user-friendly online marketplace, bolstering partnerships with both online merchants and brick-and-mortar businesses.
Frequently Asked Questions
What is the objective of the recently announced rights offering?
The rights offering aims to enhance FlexShopper's capital resources to reduce debt and support growth initiatives.
How much capital has FlexShopper raised from the rights offering?
FlexShopper raised approximately $9.4 million in gross proceeds from this offering.
What can shareholders expect after participating in the rights offering?
Participants can look forward to opportunities to increase their investments further through additional rights opportunities ahead.
How will FlexShopper utilize the proceeds from the rights offering?
The funds raised will be used to repurchase preferred stock and reduce debt, with remaining resources earmarked for general corporate growth.
Who should FlexShopper shareholders contact regarding their rights?
Shareholders should reach out to their brokers or financial advisors' Corporate Actions Departments for further participation guidance.
