FlexShopper, Inc.

Greetings. Welcome to the Flex Shopper 2022 Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A 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. Please note, this conference is being recorded. I'll now turn the conference over to your host, Carlos Sanchez of Investor Relations. You may begin.

Thank you and good morning. Welcome to Flex Shopper's third quarter 2022 earnings result conference call. With me today are Rich House, Chief Executive Officer, Russ Heiser, Chief Financial Officer, and John Davis, Chief Operating Officer. We issued our earnings release last night and corresponding investor presentation this morning, and we will be referencing these during the call. Both can be found on our investor relations section of our website. we will be available for Q&A followings today's prepared remarks. Before we begin, I would like to remind everyone that this call will contain forward-looking statements regarding future events and our financial performance, including statements regarding our market opportunity, the impact of our growth initiatives, and future financial performance. These should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent periodic SEC reports, including our quarterly report form 10Q for the third quarter ended September 30th. These statements reflect management's current beliefs, assumptions, and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. Except as required by law, we undertake no obligation to publicly update or revise any of these statements, whether as a result of any new information, future events, or otherwise. During today's discussion of our financial performance, we will provide certain financial information that constitutes non-GAAP financial measures under SEC rules. These include measures such as adjusted EBITDA, net income, and adjusted net income. These non-GAAP financial measures should not be considered replacements and should be read together with our GAAP results. Reconciliation to GAAP measurements and certain additional information are also included in today's earning release, which is available in our investor relations section of our website. This call is being recorded, and a webcast will be available for replay on the investor relations section of our website. I will now turn the call over to Rich.

Thanks, Carlos. Good morning, everyone, and thank you for joining us for the Flex Shopper third quarter 2022 earnings call. Once again, I will be joined by Chief Financial Officer Russ Heiser and the Chief Operating Officer John Davis. In the third quarter, we reported an EBITDA loss of $2.9 million and a net income loss of $6.3 million. In a moment, Russ will walk you through a more detailed review of these financial results. It appears the current macroeconomic environment is affecting the growth opportunities in our business more severely than we observed earlier this year. Apparently, the high inflationary environment coupled with slower economic growth has impacted the demand for discretionary purchases by the traditional Flex Shopper customer. In the third quarter, we observed a combination of lower response rates to our marketing initiatives coupled with an unfavorable risk score distribution of those consumers who did respond. Simply stated, we were attracting fewer new customers in our direct-to-consumer initiatives, and the consumers we did attract demonstrated a lower credit quality profile. The credit profile of these consumers resulted in a lower approval rate using our underwriting criteria. Last quarter, we told you we had proactively tightened our underwriting standards in order to deal with the declining economic environment. We did not tighten any further. in the third quarter, the assets we are generating are proving to be sound investments. However, because of lower response rates and lower approval rates, we are originating less of these assets than we anticipated. The bright spots in our business are proving to be the assets we are generating through our retail partnerships and our repeat customers. Retail partner volumes are up 20% year over year, and the repeat volumes continue to grow. Fortunately, the pivot to increasing our storefront partnerships that began earlier this year feeds into the areas of our business that are currently performing well, and we believe that will drive future growth. John will provide more detail regarding volume and credit quality a bit later in the call. After the updates provided by Russ and John, I will provide an overview of our immediate strategy moving forward. I will now turn the call over to Russ for a review of our financial results.