FlexShopper, Inc. (NASDAQ:FPAY), a Delaware-based equipment rental and leasing services company with a market capitalization of $30.8 million, announced on Thursday that Sean Hinze has resigned from its Board of Directors, effective immediately.
According to InvestingPro analysis, the company appears undervalued despite showing strong revenue growth of 24.5% over the last twelve months. The company clarified that Mr. Hinze's departure was not due to any disagreements with the company's operations, policies, or practices.
Simultaneously, the company welcomed Denis Echtchenko as a new member of the board, effective the same day. Mr. Echtchenko, 37, brings a wealth of experience from his tenure at PIMCO, where he has been working on special situations and private equity investments since March 2022. His background includes roles at Prospect Capital (NASDAQ:PSEC), Kraft Heinz (NASDAQ:KHC), Bridgewater Associates, and J.P. Morgan, highlighting his extensive expertise in investment and financial services.
InvestingPro data reveals the company maintains a healthy current ratio of 7.98, indicating strong short-term liquidity management. Mr. Echtchenko's appointment follows the terms of the Investor Rights Agreement with B2 FIE from June 10, 2016, which allows B2 FIE to nominate a director as long as they hold more than 10% of FlexShopper's outstanding common stock on a fully diluted basis.
In addition to the board changes, FlexShopper also announced amendments to the employment agreement with H. Russell Heiser Jr., the company's Chief Executive Officer. The amendment includes a salary increase to $587,000 effective from January 1, 2024, and an adjustment to his target bonus, which is now set at 100% of his base salary with a potential maximum of 200%. Furthermore, Mr. Heiser has been granted 480,770 restricted stock units (RSUs), which are set to vest over a four-year period, starting December 31, 2024, with a clause for accelerated vesting in the event of a termination following a change in control.
The announcement ensures that the size of FlexShopper's Board of Directors remains at five members and reflects the company's commitment to strong governance and executive compensation aligned with corporate performance. The details of these corporate changes are based on a recent SEC filing by FlexShopper.
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In other recent news, FlexShopper has been making significant strides in its financial performance and strategic growth. The company's third quarter results revealed a 23% increase in total revenue, reaching $39 million, and a 45% rise in adjusted EBITDA, amounting to over $12 million. Net income for common stockholders was reported as $1.2 million, or $0.05 per diluted share. H.C. Wainwright maintained a Buy rating on FlexShopper shares, recognizing the company's robust third-quarter performance and notable improvement in payment performance.
The number of retail locations using FlexShopper's services has grown significantly, reaching approximately 7,800 stores. In addition, the company has launched a rights offering aimed at raising capital and reducing debt, which is part of FlexShopper's strategic plans to enhance shareholder value. Looking ahead, FlexShopper is optimistic about its growth trajectory and strategic initiatives for 2025 and beyond, including plans for AI-driven automation to further enhance payment performance and servicing capabilities.
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