FPAY FlexShopper Inc

On December 30, 2019, FlexShopper, Inc. (the “Company”) and holders (each, a “Holder”) of at least 50.1% of the Company’s outstanding publicly traded warrants (the “Public Warrants”) entered into a Warrant Amendment and Exchange Agreement (the “Exchange Agreement”). The Public Warrants were previously issued pursuant to the Company’s public offering registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a prospectus dated September 25, 2018, as amended by post-effective amendment No. 1 filed with the Securities Exchange Commission (the “SEC”) on May 7, 2019. Pursuant to the Exchange Agreement, the Holders agreed to exchange their Public Warrants for 0.62 shares of the Company’s common stock (the “Shares”) for each of their outstanding Public Warrants, agreed with the Company to make a public offer (the “Offer”) to all other holders of the Public Warrants to exchange their Public Warrants for Shares at the same rate as the Holders, and amended the terms of the Warrant Agent Agreement for the Public Warrants to permit the Company to require that all outstanding Public Warrants not exchanged pursuant to the Offer be converted into Shares at a rate of 0.56 Shares per Public Warrant, which is 10% less than the exchange rate that will apply to the Offer (the “Warrant Amendment”).

The exchange rate of Shares for Public Warrants under the Exchange Agreement and the Offer was determined through negotiations led by certain institutional investors which held Public Warrants and are not related parties of the Company. The Holders party to the Exchange Agreement included four of the Company’s directors (or their affiliated entities), who agreed to exchange a total of 3.8% of the Public Warrants outstanding pursuant to the Exchange Agreement. These transactions are exempt from registration under Section 3(a)(9) of the Securities Act, as no commission or other remuneration will be paid or given directly or indirectly for soliciting such transactions.

The Company currently expects to commence the Offer on Monday, January 6, 2020.

Public Warrants not exchanged for Shares pursuant to the Offer will remain outstanding subject to their amended terms pursuant to the Warrant Amendment. Following the consummation of the Offer, in accordance with the terms of the Warrant Amendment, the Company intends to require the conversion of all outstanding Public Warrants to Shares at a rate of 0.56 Shares per Public Warrant as provided in the Warrant Amendment (the “Conversion”). The Public Warrants are currently traded on The Nasdaq Capital Market under the symbol “FPAYW”; however, following the completion of the Offer and Conversion, the Public Warrants will be delisted.

Copies of the Warrant Amendment and the Exchange Agreement are filed with this report as Exhibits 4.1 and 10.1, respectively, and are hereby incorporated by reference herein. The foregoing descriptions of the Warrant Amendment and the Exchange Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such documents.