FlexShopper, Inc.

Greetings and welcome to the Flex Shopper LLC second quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeremy Hellman of the Equity Group. Thank you, Jeremy. You may begin.

Thank you, operator. I'd like to remind everyone that we have posted an updated investor presentation within the IR section of the company website, www.flexshopper.com, and encourage everyone to review the forward-looking statement on page two of the presentation. With that, I would like to turn the call over to Flex Shopper CEO, Rich House. Please go ahead, Rich.

Thank you, Jeremy, and welcome everyone to our earnings call. Joining me today is our CFO, Russ Heiser. As always, Russ will be expanding on the key financial aspects for our quarterly results, and I'll cover our operational highlights. Our second quarter was one of steady growth in both our distribution channels. Overall, we had solid origination growth and also made solid progress in expanding our retail partner ecosystem. Starting with our direct-to-consumer FlexShopper.com website, we continue to invest in digital marketing programs as those are yielding customers at or below the necessary customer acquisition costs for us to achieve our return on capital hurdles. As we and many of our peers have noted, government stimulus programs have had and continue to have an impact on our customers. Historically, subprime shoppers behaved differently during tax return season when many received a relatively sizable amount of cash relative to their typical budget. This often in the past resulted in a bump in early lease payoffs and same as cash transactions. Pandemic-driven stimulus programs had a similar impact, and we are paying close attention to how the new child tax credit payments affect our customers and their shopping behavior. Overall, we see two early takeaways. First, there does appear to be some dampening of demand if customers choose to use those payments to purchase merchandise outright that they may have otherwise previously paid for over a longer period of time. Secondly, and favorably, we are also seeing some reduction in delinquencies. Turning to our retail relationships, we are pleased to report that our pilot program with a national diversified merchandise seller is set to more than double the number of storefronts prior to the holiday season. We expect to add one state with our partner, but that state accounts for an outsized portion of their stores. In our view, this is a strong testament to the value we bring to them. We also kicked off a four-state pilot with another national diversified retailer and expect to run that test through the end of the year. In both cases, the timing of our rollouts has been slightly impacted due to some degree by the recent COVID-19 resurgence rates. At this time, we remain cautiously optimistic that states will not be returning to the same shelter-in-place restrictions we saw in 2020. I'm now going to turn the call over to Russ to address specific items regarding our financial performance and corporate liquidity.