Panelists here at Sidoti, and I'm pleased to welcome FlexShopper with us today, the ticker is FPAY. Presenting with us will be CEO Russ Heiser and COO John Davis. Before I hand it over, a quick reminder: the Q&A tab is located at the bottom of your screen. Feel free to type in any questions throughout the presentation, and we can save time for a Q&A at the end. But with that said, Russ, take it away. Terrific. Thanks, everyone, for joining us this morning. Appreciate you taking the time. Quickly, so FlexShopper is essentially the modern version of the traditional Aaron's and Rent-A-Center store that you still see in strip malls across America. We've taken lease-to-own and moved it both online and as a point-of-sale option in a number of different retailers across the country, but let me walk you through the different ways we do that. There's really two channels here at FlexShopper, so unlike the traditional rent-to-own stores, we don't keep inventory. It's a purely dropship model to consumers. And the first and historical, you know, largest historical channel for us is the B2C channel, so this is our marketplace, so if you were to go to flexshopper.com, you'll see like Amazon, but instead of traditional pricing, we highlight the price per week for each of our customers. This is purely targeted to non-prime consumers sub-650 FICO scores and below. So when you think about who we compete with, this is not a, you know, buy now, pay later traditional competitor, although we fall into that group. Most of those companies, Affirm and others, will be a credit product that then caps at a 36% APR and traditionally goes down to that 660, 650 FICO score, really this near-prime consumer, not in a position to have additional credit line, perhaps, or getting a new credit card, and then they choose these other options. You know, our consumer is below that. Our consumer is not often getting approved for credit cards or additional credit lines. So we market to these customers digitally, draw them to FlexShopper.com. There they can see weekly prices, see what fits with their budget. Goods come from a number of different retailers, wholesalers, distributors, in some cases, manufacturers. It's a true marketplace. Over 77,000 unique SKUs on the site, but given that some people, some market providers are actually selling similar item types, you know, the total selection for the customer is much greater than that. They can choose what makes the most sense for them. For instance, we have a plug-in with Best Buy where we have access to their store inventory. So if a customer doesn't want to wait for it to be delivered, they can go pick it up in store an hour after signing the lease online. So it's truly allowing these non-prime consumers to shop like prime consumers. The second channel we have is the B2B channel. This is where we partner with other retailers, whether it's on their websites or through their brick-and-mortar locations, provide similar leases to them. To the extent you were to walk into your local Mavis or Monro or a number of different retailers in your neighborhood, you were to be declined for the private label credit card there, you don't have the liquidity to make the purchase, it'll automatically switch over to, through the payment waterfall, the application waterfall, it'll switch over to FlexShopper application. We ask a few more questions and then approve the customer for a lease. They can transact there and, you know, get the tires or furniture or appliances that they need and walk out the door. The two different channels we have have different economics at the core, so it's important to walk through all of them. So when a new customer comes to FlexShopper.com, we do have variable pricing for these consumers. All of it is geared towards getting a certain asset-level return. So we focus less on the non-payment. Of course, that's part of the math, but we really try to end up at a 150% asset-level return. So for that $1,000 television, the customer could be charged anywhere from $1,600 - $2,400 over the next 52 weeks. Our expectation, based upon our internal models, is to get $1,500 for that $1,000 item over 52 weeks. So that's the financing component of the B2C channel and the profits we make on that side. When it comes to, you know, as a retailer, we also have a margin associated with our products. A lot of, you know, the margins vary considerably. Consumer electronics is not quite the same as furniture, appliances, et cetera, as you would expect. But we have a blended margin across the entire marketplace of about 23%. So for that $1,000 item I mentioned, we're paying about $830 for that item. So when it comes to the economics there, we have this, and we'll keep using the $1,000 example. So we're making, you know, off the bat, we are making the 23% margin. And then over the course of 52 weeks, we're making additional 50% of the cash price of the good, the price that the customer sees. There is an acquisition cost for those consumers. And as I mentioned, we use digital marketing to drive them to our site. The margin essentially offsets that CAC or acquisition cost for that new consumer, which is about $150. Where the marketplace is especially powerful, though, is because of the repeat consumers, so if the new consumer, this is sort of, you know, the one we have underwritten, but hasn't demonstrated payment behavior to us yet, we're getting this 150% asset level return. Repeat consumers have much better payment statistics than that. Closer, including early payment options and some other discounting there, we have asset level returns closer to 180% of the cost of the good, and given that there's no acquisition cost and there's also that retail margin, the repeat consumers are extremely profitable and it works well given that 50% of online consumers come back and repeat with us. Given that only customers that make successful payments with us are able to repeat, so you can think of this sort of ultimate repeat rate of those that are able to repeat as being closer to 80%. So it's a very important side of our business, the historical side of our business, and dovetails well with our B2B channel. So this is where we go into retail stores or onto websites to help these retailers establish more sales with non-prime consumers. Consumers who would normally walk out the door without buying anything or buying a smaller ticket, we offer financing products in place so they can make that full purchase to, you know, put all four tires on the car so it's safer to get that sofa they need to replace that appliance that broke down, et cetera. There's no acquisition cost or very limited acquisition cost. We do some training in the stores that we put into marketing costs in that channel. But here we're helping the merchants sell more goods. So there's minimal acquisition cost on this channel. The asset level returns are similar. We target this 150% asset-level return. As I mentioned, there's no acquisition cost, but there's also no margin on the products. We're paying essentially the same price that if you were to walk in and use a credit card at that retailer, what they would pay. So we're not asking for discounts from the merchant. We're not paying premiums to the merchant. We're essentially paying the retail price. The repeat dynamics aren't quite the same in this channel. As you can imagine, right, you only need so many tires, you only need so many sofas, you only need so many appliances. So they tend to repeat at a lower rate. They're essentially getting the good that they need at that point in time. But they do repeat. And most of them repeat through our online channel. So when we think about our two different channels overall, when it comes to new customers, think of about 2/3 of them coming through the B2B channel and one-third coming through the digital marketing to our marketplace for new customers. When it comes to the total portfolio, though, the numbers switch around a good bit because the repeat customers tend to repeat online as opposed to in-store or on these other retailers' websites. So when it comes to total originations, it's about 2/3 coming through the marketplace and a third coming through the B2B channel. Along with this, we have some patents. You know, for those of you who want to do some light reading, you can look at the complaints that have been filed against two fairly large competitors in the Eastern District of Texas. This is Upbound Group and Katapult. We chose the Eastern District of Texas because of the quicker court process versus some of the other jurisdictions, and these are the two companies that were headquartered in that area. We have a number of patents there. Please, if you have an opportunity, dig in. We feel like we have patents around the online process where retailers and lease-to-own providers are communicating with each other in order to facilitate lease creation. Once again, not necessarily light reading, but something you can dig into. All of it's filed for you. From a financial performance perspective, you know, you can see the statistics on the left. We continue to approve a good number of customers, have a lot of spending limit that is out there. Unlike traditional lease-to-own providers, as opposed to essentially just approving a cart of goods, when the customer applies, we give them a spending limit. So that facilitates the repeat leases. So the average spending limit's essentially $2,100. If their first lease is $1,000, as long as they continue to make payments, they have this open to buy of the additional funds that they can come back in and repurchase later. You can see on the far right what's happening to total revenue, increasing pretty substantially Q3 2023 versus Q3 2024. And at the same time, the gross margin continues to increase as the asset level performance goes up. You can see that in the difference between gross revenue and net revenue when we take an allowance for bad debt. In terms of overall financial highlights, you can see on this page the increase in net revenue quarter -over -quarter, the increase in gross profit, and of course, the, you know, 45% increase in adjusted EBITDA over that same time period. Once again, quick overview: asset light. So everything is dropship, no inventory risk. We have a credit facility provider that pays for the goods. So very low operating cash flow requirements. We use the credit facility to fund the purchases. There's a number of slides here, but I'll turn it over to J.D. to really catch up on what has taken place recently. Thanks, Russ. Yeah, we're seeing some fairly positive momentum, you know, as you can imagine with our kind of customer base and the products that we sell and finance. The holidays are a very important time for us, and you know, what we saw in December of this year compared to December of last year was very strong year-to-year increases. Overall originations were up 35%. You know, on the marketplace, they were up 42%. That was actually being driven by a record number of new customer applications. You know, application volume is the KPI for customer demand. And you know, with customer demand, you know, you can achieve that through you know, spending more on marketing or you can get more organic demand, better conversion on traffic. And what we saw actually was the latter. So that increase in application volume, that 34%, it actually came at the same time as a 40% reduction in our marketplace marketing cost per new customer. We actually had this growth and had nominal decrease in our marketing spend, which we're very excited about. Now, with new customers and you know, with a growing book, you know, it's easy to give money away, but are they paying you back? But actually what we've seen is you know, a continued improvement in our asset quality. You know, and this is something that we've talked about in previous conference calls and updates to investors where our bad debt, you know, percentage of revenue has actually decreased and continues to decrease year-over-year. It's down roughly 750 basis points year-over-year. And we've had 12 consecutive months of seasoned originations actually having higher year-over-year cumulative payment rates, which translates into our bad debt ratio. So we're very pleased with the trends that we're seeing. We're seeing strong customer demand. We're seeing good credit quality. And, you know, we're very excited with these trends as we move into 2025. So some, you know, some highlights of what's coming on. So, you know, Russ talked about this B2B channel. You know, at the beginning of 2024, you know, we roughly had, you know, 2,500 storefronts. Our goal was actually to have 5,000 that offered the FlexShopper product at the end of 2024, but actually we exceeded our target and had over 7,800, so it's a 250% increase in the signed store count. Now, what happens is that actually becomes a good annuity for future revenue. You know, it takes a bit of time for a store to become a productive store, you know, with training, with the knowledge of this new payment option in the marketplace by consumers, so what we find is there is a trailing increase in revenue as those come, so we're excited about what that can potentially mean for revenue and origination growth in 2025, and when it comes to the pipeline of adding new store counts, you know, we continue to see positive trends. We're working on some, you know, some additional deals that, you know, hopefully keeps the trend in a very strong year-over-year way. You know, all of this, you know, works into, you know, adding earnings, adding revenue, adding EBITDA. And one other thing that we just completed, we just closed our first round of a rights offering where we raised roughly $12 million in, you know, in common equity. And the goal with this is to retire most of our Series 2 preferred stock where we actually have a buyback option with the major holder of that at, you know, roughly a 50% discount to the liquidation preference, which adds a lot of, you know, equity value to common shareholders as well as, you know, looking to reduce our debt. So, you know, as Russ mentioned, we finance our lease, you know, product purchases through a credit fund line that we have. The cost of funds that we pay, you know, by raising equity, actually, it is accretive to earnings with both of those options. So, in essence, what we're looking to do with these raises is to, you know, equitize the balance sheet and add more earnings to our common shareholders versus, you know, paying it through dividends and interest costs. So we're excited about the trend there, you know, good initial raise, and we'll continue to keep investors informed on how that progresses. You know, and then Russ had, you know, briefly mentioned the patent infringement lawsuit. You know, this is a, we're confident about the merits of our patents and that should progress, you know, given the jurisdiction that we filed in. You know, hopefully we'll have some good updates coming into 2025 as that progresses. Thanks, J.D. There's a lot of moving pieces here at FlexShopper, right? We have a direct-to-consumer business that's sort of this Amazon-esque with, you know, when you take into the financing piece of this with very high margins, it's really about pushing as many consumers through the process as possible given how profitable the unit economics are in that piece of the business. We have this other side of the business where we partner with retailers. That's, you know, I guess, you know, we can think of as the buy now, pay later side of the business, you know, the non-prime version of Affirm, so to speak. We continue to take advantage of our technology. And I think in the coming months, you'll see some additional innovations as we are able to take this marketplace and spin out additional websites that will lower acquisition cost opportunities through merchandising to continue to expand margins on that side of the business. But the real block you're tackling is continue to have very high asset-level returns for the customers that come to FlexShopper. With that, happy to open it up to questions. Great. Well, thank you, Russ and John. We can now open the floor for Q&A here. And our first question from the attendees, can you talk about the revenue mix between the B2C and B2B channels? Sure. Following what I said earlier, it's approximately, when it comes to new customers, it's weighted towards the B2B side. But when it comes to the total customer mix and total revenue, 2/3 is coming through the online because that's our repeat engine for all of our consumers and a third coming through the B2B. Great. And then what trends have you seen with customer acquisition costs, you know, over the past 12 months or so? J.D., do you want to take that one? Yeah, they've actually improved by a decent amount. You know, the cost required was roughly $150, you know, coming into the holiday season. And that is a pretty good drop from what we saw towards the beginning of the year where, and this is on the digital side, you know, as Russ had mentioned, the B2B side is, you know, pretty, it's a nominal marketing cost. But, you know, we are seeing CACs above $200 towards the beginning of 2024. So we've seen an increase in demand and an increase in conversion rates coming into the, you know, the real heat of the season in Q4. So we're pleased with that trend. We don't see that changing in early data in 2025 yet. Part of the, you know, there's two pieces of that. One is, you know, we do a better job, right? We're doing a better job of bringing customers in and are being more effective from a marketing perspective. The other side of this is, you know, this is really about access to credit. And so as we see the other providers of credit above us tighten, we have more opportunities to go after those consumers. It's not about going deeper to find more consumers. A lot of it is about more of our best consumers now being denied by the traditional forms of credit that would sit above us, and then they essentially fall down to us, and so that's where a lot of this growth has come from. I think what, you know, given that we're not capped from, you know, an APR perspective, because we're not a loan product, it gives us a little bit more room to be flexible with these consumers. You know, as we talked about, our markups are fairly significant, but priced appropriately for the consumer type. What we want to continue to do is reach out to those upstream customers and figure out how we can best, you know, continue to attract them to the site and continue to lower acquisition costs. Which also gives a tailwind to keeping our bad debt levels better. You know, if you're increasing volume, but you're actually increasing at the same time the average credit score of who you're acquiring, then, you know, that is a double benefit. Yeah. And then more of a general, you know, business model question here. Given the, you know, contract nature of the business with the leases, you know, can you talk about earnings visibility a little bit? Do you tend to agree that earnings, you know, earnings visibility is high here? And then it seems like the variable would really be the default ratio. Can you talk about how that ratio has trended relative to your expectations? Sure, J.D., why don't you talk about default ratios a little bit, and then I'll dive into the other piece. Yeah. Default ratio, and I mentioned this a little bit earlier, has improved by a decent amount, you know, from 2023 to 2024. You know, the combination of, you know, macroeconomic environment, you know, the, you know, our customers suffer through high levels of inflation, and as that has moderated and incomes have caught up, that's been a natural tailwind for our customers. Now, on the things that we can directly control, we've invested a lot in capabilities on credit risk data analytics and fraud mitigation. And we've added a lot of new modeling, a lot of machine learning algorithm advancements, and a lot of new kind of IP and process, really combining data from on-site data on, you know, what customers are trying to purchase, on how they got here, on how they interact with our website, as well as traditional and alternative credit data. So all of that. And then if you add a mix, an increasing and improving mix of credit scores, that's all, you know, putting a nice foundation on that trend from a risk standpoint. Sure. From a forecasting perspective, you would think it would be fairly straightforward. You know, where we run into a few wrinkles is the accounting around the leases. So when we have to recognize both the retailer margin that we have on each of these goods, even though we receive it upfront, it's recognized over the 52-week time period, same from the lease income, you know, recognized over the 52 weeks. You know, when it comes to the bad debt assumptions, we're a little bit hands-tied because, you know, even though our models will show the improvements that are taking place in terms of asset-level performance, from an accounting perspective, we actually have a, we need to actually look at completed leases. We're really looking at underwriting from 15 months ago when it comes to the bad debt allowances that are on our income statement. We, you know, from a revenue perspective, we have a timing issue where it's taking, you know, 12 months, 52 weeks to recognize all of this revenue. You know, the holidays are a perfect example. The fourth quarter was a, you know, record-breaking origination period, and it will simply show, let's say most of this was geared towards the, between the Thanksgiving and Christmas time period. We'll only show a few weeks of that revenue in the fourth quarter, with most of it showing up in Q1. However, when it comes to, you know, all of our expenses, especially marketing expense, which, you know, increases seasonally, as you can imagine, it's all recognized day one. So there's a lot of forecasting from an operational perspective is fairly straightforward. When it comes to the financials, there's just a lot of noise, you know, in a lot of ways. When we look at our financial statements, you're really looking at the business from, you know, the revenue from, you know, let's, you know, we can average the time, the revenue from sort of six to eight months ago and the expenses from today. So it creates a little bit of a mismatch. Also, when it comes to new store rollouts, as much as, you know, not only is there the revenue recognition issue, but when it comes to rolling out these new stores, there is some time to get them up to speed and maximize the amount of lease originations each of these doors do. So moving from a few thousand stores to, you know, almost 8,000, you end up with a, as much as you would like to have it turn on immediately and be as efficient as possible, there is some growing pains associated with the rollouts, and it really takes sort of six to eight months for them to maximize originations. And then, as I mentioned, it takes a year for it to really start to show up in revenue. That's helpful. And then question on the marketing side here, you know, are you still growing the retail network? I guess on the B2C side, do you provide any data such as, you know, site visits or anything like that? The answer to the first question is yes, we're always continuing to increase the partners and the product selections that we have. In fact, you know, we've expanded into larger freight shipments, you know, using a less than truckload, you know, shipping method. The benefit of that is get these larger parcel goods that have typically higher margins, and it just expands the kind of products that our customers can purchase with their approvals and diversifies the product mix, you know, away from, you know, what traditional is very, very, very heavy electronics to still majority electronics, but, you know, diversifying into other types of products. We haven't disclosed site visits, but as you can imagine, you know, application volume will be highly correlated to site visits. So the fact that we had record application volume in December, you know, it shows the kind of customer demand that we're seeing, at least on FlexShopper. And when it comes to the B2B door count, as you saw, you know, significant growth this past year in 2024, we continue to focus on growing it. You know, when it comes to, you know, when you're looking at a, you know, 24-month or longer IRR for customers, the B2C channel wins out, right, because of the higher repeat rate despite the acquisition cost upfront. When it comes to, you know, six-month IRRs and you're trying to optimize cash, there's a lot of benefits to the B2B expansion there. And like I said, the B2B expansion, those customers come back and repeat on the marketplace over time. So, you know, we're focused on being as efficient as we can be on the digital side and, of course, trying to grow the storefront opportunities for originations as much as possible. Great. Well, Russ and John, we really appreciate the overview and the information. We'll conclude there. I know there may have been a handful of questions we didn't get to. You know, feel free to reach out to FlexShopper directly, or you can reach out to Sidoti. Russ, thanks again for your time. Thanks a lot. Thank you.