−Removed: An investment in our common stock, preferred stock or other securities involves a number of risks.
−Removed: You should carefully consider each of the risks described below before deciding to invest in our securities.
+Added: An investment in our common stock, preferred stock or other securities involves a number of risks.
+Added: You should carefully consider each of the risks described below, among others, before deciding to invest in our securities.
If any of the following risks develops into actual events, our business, financial condition or results of operations could be negatively affected, the market prices of our securities could decline and you may lose all or part of your investment.
−Removed: The impact of COVID-19 on global commercial activity and the corresponding volatility in financial markets is evolving.
−Removed: Initially, the global impact of the outbreak led to many federal, state and local 
−Removed: governments instituting quarantines and restrictions on travel.
+Added: The response to COVID-19 on global commercial activity and the corresponding volatility in financial markets is evolving.
+Added: Initially, the global impact of the outbreak led to many federal, state and local governments instituting quarantines and restrictions on travel.
More recently, there have been disruptions in global supply chains that have adversely impacted a number of industries, such as transportation, hospitality and entertainment.
−Removed: In addition, there have been significant inflation and labor shortages over the past year.
−Removed: The outbreak could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown or recession.
−Removed: The rapid development and fluidity of this situation preclude any accurate prediction as to the ultimate impact of COVID-19.
−Removed: Nevertheless, COVID-19 presents material uncertainty and risk with respect to our performance and financial results.
−Removed: For additional information, see "—Other Risks to Our Business—
−Removed: COVID-19 has caused severe disruptions in the U.S.
−Removed: economy, and may have an adverse impact on our performance, results of operations and access to capital ."
+Added: In addition, there have been significant inflation and labor shortages over the past two years which could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown or recession.
+Added: The rapid development and fluidity of this situation preclude any accurate prediction as to the ultimate impact of inflation, rising interest rates and other consequences to the responses to COVID-19.
+Added: The global response to COVID-19 presents material uncertainty and risk with respect to our performance and financial results.
+Added: For additional information, see "—Other Risks to Our Business— The reaction to COVID-19 caused severe disruptions in the U.S.
+Added: economy and may have further adverse impacts on our performance, results of operations and access to capital."
Our Cash Flows and Net Income Are Dependent Upon Payments from Our Investments in Receivables
−Removed: The collectability of our investments in receivables is a function of many factors including the criteria used to select who is issued credit, the pricing of the credit products, the lengths of the relationships, general economic conditions, the rate at which consumers repay their accounts or become delinquent, and the rate at which consumers borrow funds.
+Added: The collectability of our investments in receivables is a function of many factors including the criteria used to select who is issued credit, the pricing of the credit products, the lengths of the relationships, general economic conditions, the rate at which consumers repay their accounts or become delinquent, and the rate at which consumers borrow funds.
Deterioration in these factors would adversely impact our business.
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Our portfolio of receivables is not diversified and primarily originates from consumers whose creditworthiness is considered less than prime.
−Removed: Historically, we have invested in receivables in one of two ways—we have either (i) invested in receivables originated by lenders who utilize our services or (ii) invested in or purchased pools of receivables from other issuers.
+Added: Historically, we have invested in receivables in one of two ways—we have either (i) invested in receivables originated by lenders who utilize our services or (ii) invested in or purchased pools of receivables from other issuers.
In either case, substantially all of our receivables are from borrowers represented by credit risks that regulators classify as less than prime.
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Economic slowdowns increase our credit losses.
−Removed: During periods of economic slowdown or recession, we generally experience an increase in rates of delinquencies and frequency and severity of credit losses.
−Removed: Our actual rates of delinquencies and frequency and severity of credit losses may be comparatively higher during periods of economic slowdown or recession.
−Removed: Because a significant portion of our reported income is based on management’s estimates of the future performance of receivables, differences between actual and expected performance of the receivables may cause fluctuations in net income.
−Removed: Significant portions of our reported income (or losses) are based on management’s estimates of cash flows we expect to receive on receivables, particularly for such assets that we report based on fair value.
−Removed: The expected cash flows are based on management’s estimates of interest rates, default rates, payment rates, cardholder purchases, servicing costs, and discount rates.
+Added: During periods of economic slowdown, recession or rapidly rising inflation rates, we generally experience an increase in rates of delinquencies and frequency and severity of credit losses.
+Added: Our actual rates of delinquencies and frequency and severity of credit losses may be comparatively higher during periods of economic slowdown or recession or rapidly rising inflation rates.
+Added: Because a significant portion of our reported income is based on management’s estimates of the future performance of receivables, differences between actual and expected performance of the receivables may cause fluctuations in net income.
+Added: Significant portions of our reported income (or losses) are based on management’s estimates of cash flows we expect to receive on receivables, particularly for such assets that we report based on fair value.
+Added: The expected cash flows are based on management’s estimates of credit losses, payment rates, servicing costs, discount rates and yields earned on credit card receivables.
These estimates are based on a variety of factors, many of which are not within our control.
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Similarly, levels of loss and delinquency can result in our being required to repay lenders earlier than expected, thereby reducing funds available to us for future growth.
−Removed: Due to our lack of significant experience with Internet consumers, we may not be able to evaluate their creditworthiness.
−Removed: Receivables owned by consumers and acquired over the internet present unique risk characteristics and exhibit higher rates of fraud.
+Added: Internet consumers have unique risk profiles and we may not be able to evaluate their creditworthiness.
+Added: Receivables owed by consumers and acquired over the internet present unique risk characteristics and exhibit higher rates of fraud.
As a result, we may not be able to successfully evaluate the creditworthiness of these potential consumers.
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We Are Substantially Dependent Upon Borrowed Funds to Fund Receivables We Purchase
−Removed: We finance receivables that we acquire in large part through financing facilities.
+Added: We finance receivables that we acquire in large part through financing facilities.
All of our financing facilities are of finite duration (and ultimately will need to be extended or replaced) and contain financial covenants and other conditions that must be fulfilled in order for funding to be available.
−Removed: Moreover, some of our facilities currently are in amortization stages (and are not allowing for the funding of any new loans) based on their original terms.
The cost and availability of equity and borrowed funds is dependent upon our financial performance, the performance of our industry overall and general economic and market conditions, and at times equity and borrowed funds have been both expensive and difficult to obtain.
−Removed: If additional financing facilities are not available in the future on terms we consider acceptable, we will not be able to purchase additional receivables and those receivables may contract in size.
+Added: If additional financing facilities are not available in the future on terms we consider acceptable, we will not be able to purchase additional receivables and those receivables may contract in size.
Capital markets may experience periods of disruption and instability, potentially limiting our ability to grow our receivables.
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Moreover, the re-appearance of market conditions similar to those experienced from 2008 through 2009 for any substantial length of time or worsened market conditions could make it difficult for us to borrow money or to extend the maturity of or refinance any indebtedness we may have under similar terms and any failure to do so could have a material adverse effect on our business.
−Removed: Unfavorable economic and political conditions, including future recessions, political instability, geopolitical turmoil and foreign hostilities, energy disruptions, inflation and disease, pandemics and other serious health events, also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.
−Removed: COVID-19 continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets.
−Removed: The pandemic has, in part, caused disruptions in global supply chains that have adversely impacted a number of industries, such as transportation, hospitality and entertainment.
−Removed: In addition, there have been significant inflation and labor shortages over the past year.
+Added: Unfavorable economic and political conditions, including future recessions, political instability, geopolitical turmoil and foreign hostilities, energy disruptions, inflation, disease, pandemics and other serious health events, also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.
+Added: The reaction to COVID-19 adversely impacted global commercial activity and contributed to significant volatility in financial markets.
+Added: COVID-19, in part, caused disruptions in global supply chains that adversely impacted a number of industries, such as transportation, hospitality and entertainment.
+Added: In addition, there have been significant inflation and labor shortages over the past two years.
The outbreak could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown.
The rapid development and fluidity of this situation preclude any accurate prediction as to the ultimate adverse impact of the coronavirus response.
−Removed: Nevertheless, the pandemic presents material uncertainty and risk with respect to our performance and financial results.
+Added: Nevertheless, COVID-19 presents material uncertainty and risk with respect to our performance and financial results.
We may in the future have difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may cause us to reduce the volume of receivables we purchase or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows.
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The recent growth of our investments in private label credit and general purpose credit card receivables may not be indicative of our ability to grow such receivables in the future.
−Removed: Our period-end managed receivables balance for private label credit and general purpose credit card receivables grew to $2,314.6 million at September 30, 2023, from $2,049.5 million at September 30, 2022.
+Added: Our period-end managed receivables balance for private label credit and general purpose credit card receivables grew to $2,317.6 million at March 31, 2024, from $2,055.0 million at March 31, 2023.
The amount of such receivables has fluctuated significantly over the course of our operating history.
2 unchanged sentences
Reliance upon relationships with a few large retailers in the private label credit operations may adversely affect our revenues and operating results from these operations.
−Removed: Our five largest retail partners accounted for over 70% of our outstanding private label credit receivables as of September 30, 2023.
−Removed: Although we are adding new retail partners on a regular basis, it is likely that we will continue to derive a significant portion of this operations’
−Removed: receivables base and corresponding revenue from a relatively small number of partners in the future.
−Removed: If a significant partner reduces or terminates its relationship with us, these operations’
−Removed: revenue could decline significantly and our operating results and financial condition could be harmed.
+Added: Our five largest retail partners accounted for 70% of our outstanding private label credit receivables as of March 31, 2024.
+Added: Although we are adding new retail partners on a regular basis, it is likely that we will continue to derive a significant portion of this operations’ receivables base and corresponding revenue from a relatively small number of partners in the future.
+Added: If a significant partner reduces or terminates its relationship with us, these operations’ revenue could decline significantly and our operating results and financial condition could be harmed.
We Operate in a Heavily Regulated Industry
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Furthermore, negative publicity relating to any specific inquiry or investigation could hurt our ability to conduct business with various industry participants or to generate new receivables and could negatively affect our stock price, which would adversely affect our ability to raise additional capital and would raise our costs of doing business.
−Removed: If any deficiencies or violations of law or regulations are identified by us or asserted by any regulator or require us or issuing banks to change any practices, the correction of such deficiencies or violations, or the making of such changes, could have a material adverse effect on our financial condition, results of operations or business.
+Added: If any deficiencies or violations of law or regulations are identified by us or asserted by any regulator or require us or issuing banks to change any practices, the correction of such deficiencies or violations, or the making of such changes, could have a material adverse effect on our financial condition, results of operations or business.
In addition, whether or not these practices are modified when a regulatory or enforcement authority requests or requires, there is a risk that we or other industry participants may be named as defendants in litigation involving alleged violations of federal and state laws and regulations, including consumer protection laws.
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If litigation on similar theories were brought against us when we work with a federally insured bank that makes loans and were such an action successful, we could be subject to state usury limits and/or state licensing requirements, loans in such states could be deemed void and unenforceable, and we could be subject to substantial penalties in connection with such loans.
−Removed: The case law involving whether an originating lender, on the one hand, or a third party, on the other hand, is the “true lender”
−Removed: of a loan is still developing and courts have come to different conclusions and applied different analyses.
−Removed: The determination of whether a third-party service provider is the “true lender”
−Removed: is significant because third parties risk having the loans they service becoming subject to a consumer’s state usury limits.
−Removed: A number of federal courts that have opined on the “true lender”
−Removed: issue have looked to who is the lender identified on the borrower’s loan documents.
−Removed: A number of state courts and at least one federal district court have considered a number of other factors when analyzing whether the originating lender or a third party is the “true lender,”
−Removed: including looking at the economics of the transaction to determine, among other things, who has the predominant economic interest in the loan being made.
−Removed: If we were re-characterized as a “true lender”
−Removed: with respect to the receivables originated by the bank that utilizes our technology platform and other services, such receivables could be deemed to be void and unenforceable in some states, the right to collect finance charges could be affected, and we could be subject to fines and penalties from state and federal regulatory agencies as well as claims by borrowers, including class actions by private plaintiffs.
+Added: The case law involving whether an originating lender, on the one hand, or a third party, on the other hand, is the "true lender" of a loan is still developing and courts have come to different conclusions and applied different analyses.
+Added: The determination of whether a third-party service provider is the "true lender" is significant because third parties risk having the loans they service becoming subject to a consumer’s state usury limits.
+Added: A number of federal courts that have opined on the "true lender" issue have looked to who is the lender identified on the borrower’s loan documents.
+Added: A number of state courts and at least one federal district court have considered a number of other factors when analyzing whether the originating lender or a third party is the "true lender," including looking at the economics of the transaction to determine, among other things, who has the predominant economic interest in the loan being made.
+Added: If we were re-characterized as a "true lender" with respect to the receivables originated by the banks that utilize our technology platform and other services, such receivables could be deemed to be void and unenforceable in some states, the right to collect finance charges could be affected, and we could be subject to fines and penalties from state and federal regulatory agencies as well as claims by borrowers, including class actions by private plaintiffs.
Even if we were not required to change our business practices to comply with applicable state laws and regulations or cease doing business in some states, we could be required to register or obtain lending licenses or other regulatory approvals that could impose a substantial cost on us.
−Removed: If the bank that originates loans utilizing our technology platform were subject to such a lawsuit, it may elect to terminate its relationship with us voluntarily or at the direction of its regulators, and if it lost the lawsuit, it could be forced to modify or terminate such relationship.
+Added: If the banks that originate loans utilizing our technology platform were subject to such a lawsuit, they may elect to terminate their relationships with us voluntarily or at the direction of their regulators, and if they lost the lawsuit, they could be forced to modify or terminate such relationships.
In addition to true lender challenges, a question regarding the applicability of state usury rates may arise when a loan is sold from a bank to a non-bank entity.
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Supreme Court to deny certiorari, the U.S.
−Removed: Solicitor General, joined by the Office of the Comptroller of the Currency (“OCC”), noted that the Second Circuit (Connecticut, New York and Vermont) analysis was incorrect.
+Added: Solicitor General, joined by the Office of the Comptroller of the Currency ("OCC"), noted that the Second Circuit (Connecticut, New York and Vermont) analysis was incorrect.
On remand, the U.S.
−Removed: District Court for the Southern District of New York concluded on February 27, 2017, that New York’s state usury law, not Delaware’s state usury law, was applicable and that the plaintiff’s claims under the FDCPA and state unfair and deceptive acts and practices could proceed.
−Removed: To that end, the court granted Madden’s motion for class certification.
+Added: District Court for the Southern District of New York concluded on February 27, 2017, that New York’s state usury law, not Delaware’s state usury law, was applicable and that the plaintiff’s claims under the FDCPA and state unfair and deceptive acts and practices could proceed.
+Added: To that end, the court granted Madden’s motion for class certification.
At this time, it is unknown whether Madden will be applied outside of the defaulted debt context in which it arose.
The facts in Madden are not directly applicable to our business, as we do not engage in practices similar to those at issue in Madden.
−Removed: However, to the extent that the holding in Madden is broadened to cover circumstances applicable to our business, or if other litigation on related theories were brought against us or others and were successful, or we otherwise were found to be the “true lender,”
−Removed: we could become subject to state usury limits and state licensing laws, in addition to the state consumer protection laws to which we are already subject, in a greater number of states, loans in such states could be deemed void and unenforceable, and we could be subject to substantial penalties in connection with such loans.
−Removed: In response to the uncertainty Madden created as to the validity of interest rates of bank-originated loans sold in the secondary market, in May 2020 and June 2020, the OCC and the FDIC, respectively, issued final rules that reaffirmed the “valid when made”
−Removed: doctrine and clarified that when a bank sells, assigns, or otherwise transfers a loan, the interest rates permissible prior to the transfer continue to be permissible following the transfer.
+Added: However, to the extent that the holding in Madden is broadened to cover circumstances applicable to our business, or if other litigation on related theories were brought against us or others and were successful, or we otherwise were found to be the "true lender," we could become subject to state usury limits and state licensing laws, in addition to the state consumer protection laws to which we are already subject, in a greater number of states, loans in such states could be deemed void and unenforceable, and we could be subject to substantial penalties in connection with such loans.
+Added: In response to the uncertainty Madden created as to the validity of interest rates of bank-originated loans sold in the secondary market, in May 2020 and June 2020, the OCC and the FDIC, respectively, issued final rules that reaffirmed the "valid when made" doctrine and clarified that when a bank sells, assigns, or otherwise transfers a loan, the interest rates permissible prior to the transfer continue to be permissible following the transfer.
In the summer of 2020, a number of state attorneys general filed suits against the OCC and the FDIC, challenging these "valid when made" rules.
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Although the practical consequences of Madden have diminished since the initial ruling, uncertainty remains in this area of law.
−Removed: The bank that we support in connection with its extension of loans and one of our subsidiaries currently are involved in a dispute with the Maryland Commissioner of Financial Regulation with respect to the extent to which federal preemption preempts state regulation of bank activities related to the lending process, such as lender licensing requirements and aspects of those licensing requirements that purport to limit the rate of interest that can be charged.
−Removed: The Commissioner issued a "charge letter" making various assertions regarding the applicability of the licensing requirements and interest rate limitations, with the case to be heard in the Maryland Office of Administrative Hearings where the case is currently pending.
−Removed: The ultimate remedy sought by the Commissioner is the invalidation of loans to Maryland residents.
−Removed: We believe that preemption should apply and that the licensing requirements should not apply to the bank in its making loans in Maryland, but the ultimate outcome could be unfavorable.
−Removed: In light of the amount of loans involved, we do not believe that an adverse outcome would be material, but it could result in further erosion of federal preemption and our ability to operate as we currently do in Maryland and other states.
−Removed: We support a single bank that markets general purpose credit cards and certain other credit products directly to consumers.
−Removed: We acquire interests in and service the receivables originated by that bank.
−Removed: The bank could determine not to continue the relationship for various business reasons, or its regulators could limit its ability to issue credit cards utilizing our technology platform or to originate some or all of the other products that we service or require the bank to modify those products significantly and could do either with little or no notice.
−Removed: Any significant interruption or change of our bank relationship would result in our being unable to acquire new receivables or develop certain other credit products.
−Removed: Unless we were able to timely replace our bank relationship, such an interruption would prevent us from acquiring newly-originated credit card receivables and growing our investments in private label credit and general purpose credit card receivables.
+Added: A bank that we support in connection with its extension of loans and one of our subsidiaries was involved in a dispute with the Maryland Commissioner of Financial Regulation with respect to the extent to which federal preemption preempts state regulation of bank activities related to the lending process, such as lender licensing requirements and aspects of those licensing requirements that purport to limit the rate of interest that can be charged.
+Added: The Commissioner issued a "charge letter" making various assertions regarding the applicability of the licensing requirements and interest rate limitations.
+Added: The ultimate remedy sought by the Commissioner was the invalidation of loans to Maryland residents.
+Added: We were successful in demonstrating that federal preemption applied and that the licensing requirements did not apply to the bank in its making loans in Maryland and the matter is closed.
+Added: The CFPB recently issued a final rule regarding credit card late fees, which represents a significant departure from the rules that are currently in effect.
+Added: Absent a successful legal challenge, we expect the rule will have a significant adverse impact on our business, results of operations and financial condition for at least the short term and, depending on the effectiveness of our actions taken in response to the rule, potentially over the long term.
+Added: In March 2024, the CFPB published a final rule that would significantly reduce the safe harbor amount for late fees that credit card issuers are authorized to charge.
+Added: Absent a successful legal challenge, the rule will:
+Added: (i) decrease the safe harbor amount for credit card late fees to $8 and eliminate a higher safe harbor dollar amount for subsequent late payments;
+Added: and (ii) eliminate the annual inflation adjustments that currently exist for the late fee safe harbor dollar amounts.
+Added: The "safe harbor" dollar amounts referenced in the CFPB’s rulemaking refer to the amounts that credit card issuers may charge as late fees under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the "CARD Act") without reference to the issuer’s cost to collect.
+Added: Under the CARD Act, these safe harbor amounts, since their initial implementation, have been subject to annual adjustment based on changes in the Consumer Price Index, and the safe harbor amounts are currently set at $30 for an initial late fee and $41 for subsequent late fees incurred in one of the next six billing cycles.
+Added: Accordingly, the $8 safe harbor amount on late fees (and the elimination of the annual inflation-based adjustment thereto) would represent a significant decrease from the current safe harbor amounts.
+Added: The final rule is currently slated to become effective on May 14, 2024, subject to any court-imposed injunction resulting from litigation.
+Added: Shortly after the final rule was published, a lawsuit was filed in U.S.
+Added: District Court for the Northern District of Texas (Ft.
+Added: Worth Division) by the U.S.
+Added: Chamber of Commerce, the American Bankers Association and various other parties, challenging the rule and seeking a preliminary injunction enjoining the rule from becoming effective during the pendency of the litigation.
+Added: The lawsuit asserts that the rule would ultimately harm those consumers the CFPB is charged with protecting and seeks to have the rule vacated on various grounds, including that the CFPB (i) violated the CARD Act by preventing issuers from collecting reasonable and proportional late fees when cardholders do not pay their bills on time, (ii) violated the Administrative Procedure Act by promulgating a final rule that is arbitrary and capricious, relying on inappropriate, incomplete and non-public data;
+Added: and (iii) issued the rulemaking with funds drawn in violation of the U.S.
+Added: Constitution’s Appropriations Clause.
+Added: Assuming these legal challenges are not successful and the CFPB’s final rule becomes effective, whether that be on May 14, 2024 or at a later date, this rule will represent an approximately 75% reduction in the amount of late fees that may be charged under the CARD Act safe harbor, which we expect will have a significant adverse impact on our revenue, results of operations and other financial metrics for at least the short term and, depending on the effectiveness of the mitigating actions that we take in response to the rule, potentially over the long term.
+Added: We have already executed on a number of strategies designed to limit the impact of the final rule on us and we continue to evaluate various other mitigating strategies, but it may not be feasible for us to fully implement these strategies in the short term, and these efforts ultimately may not be successful even if and when fully implemented.
+Added: Moreover, the final rule (and certain of our mitigating strategies) may present other risks and adverse impacts to our business, results of operations and financial condition, which could include, without limitation, the loss of customers due to tightened underwriting standards or negative customer response to higher rates and fees, impacts to customer payment behavior due to decreased incentives to pay, further regulatory action in response to mitigating strategies that may be employed by us or other credit card issuers, adverse impacts to or disputes with our brand partners, strategic non-renewals of certain brand partner relationships that cease to be profitable, and balance sheet impairments, including of goodwill, long-lived assets and other prepaid or intangible assets.
+Added: We support banks that market general purpose credit cards and certain other credit products directly to consumers.
+Added: We acquire interests in and service the receivables originated by these banks.
+Added: The banks could determine not to continue the relationship for various business reasons, or their regulators could limit their ability to issue credit cards utilizing our technology platform or to originate some or all of the other products that we service or require the banks to modify those products significantly and could do either with little or no notice.
+Added: Any significant interruption or change of our bank relationships would result in our being unable to acquire new receivables or develop certain other credit products.
+Added: Unless we were able to timely replace our bank relationships, such an interruption would prevent us from acquiring newly-originated credit card receivables and growing our investments in private label credit and general purpose credit card receivables.
In turn, it would materially adversely impact our business.
−Removed: The FDIC has issued examination guidance affecting the bank that utilizes our technology platform to market general purpose credit cards and certain other credit products and these or subsequent new rules and regulations could have a significant impact on such credit products.
−Removed: The bank that utilizes our technology platform and other services to market general purpose credit cards and certain other credit products is supervised and examined by both the state that charters it and the FDIC.
−Removed: If the FDIC or a state supervisory body considers any aspect of the products originated utilizing our technology platform to be inconsistent with its guidance, the bank may be required to alter or terminate some or all of these products.
−Removed: In July 2016, the board of directors of the FDIC released examination guidance relating to third-party lending as part of a package of materials designed to “improve the transparency and clarity of the FDIC’s supervisory policies and practices”
−Removed: and consumer compliance measures that FDIC-supervised institutions should follow when lending through a business relationship with a third party.
−Removed: The proposed guidance, if finalized, would apply to all FDIC-supervised institutions that engage in third-party lending programs, including the bank that utilizes our technology platform and other services to market general purpose credit cards and certain other credit products.
−Removed: The proposed guidance elaborates on previously-issued agency guidance on managing third-party risks and specifically addresses third-party lending arrangements where an FDIC-supervised institution relies on a third party to perform a significant aspect of the lending process.
−Removed: The types of relationships that would be covered by the guidance include (but are not limited to) relationships for originating loans on behalf of, through or jointly with third parties, or using platforms developed by third parties.
−Removed: If adopted as proposed, the guidance would result in increased supervisory attention of institutions that engage in significant lending activities through third parties, including at least one examination every 12 months, as well as supervisory expectations for a third-party lending risk management program and third-party lending policies that contain certain minimum requirements, such as self-imposed limits as a percentage of total capital for each third-party lending relationship and for the overall loan program, relative to origination volumes, credit exposures (including pipeline risk), growth, loan types, and acceptable credit quality.
−Removed: While the guidance has never formally been adopted, it is our understanding that the FDIC has relied upon it in its examination of third-party lending arrangements.
−Removed: On July 20, 2020, the FDIC announced that it is seeking the public's input on the potential for a public/private standard-setting partnership and voluntary certification program to promote the effective adoption of innovative technologies at FDIC-supervised financial institutions.
−Removed: Released as part of the FDiTech initiative, the request asks whether the proposed program might reduce the regulatory and operational uncertainty that may prevent financial institutions from deploying new technology or entering into partnerships with technology firms, including "fintechs." For financial institutions that choose to use the system, a voluntary certification program could help standardize due diligence practices and reduce associated costs.
−Removed: At this time, it is unclear what impact this request and potential proposal will have on our operations.
−Removed: On July 13, 2021, the Federal Reserve, Office of the Comptroller of the Currency, and the FDIC issued proposed guidance on managing risks associated with third-party relationships, including relationships with fintech entities and bank/fintech sponsorship arrangements.
−Removed: The guidance sets forth expectations for managing risk throughout the life cycle of such arrangements, including planning, due diligence and contract negotiation, oversight and accountability, ongoing monitoring, and termination.
−Removed: We will continue to monitor this guidance as it potentially becomes final.
+Added: The FDIC has issued guidance affecting the banks that utilize our technology platform to market general purpose credit cards and certain other credit products and these or subsequent new rules and regulations could have a significant impact on such credit products.
+Added: The banks that utilize our technology platform and other services to market general purpose credit cards and certain other credit products are supervised and examined by both the state that charters them and the FDIC.
+Added: If the FDIC or a state supervisory body considers any aspect of the products originated utilizing our technology platform to be inconsistent with its guidance, the banks may be required to alter or terminate some or all of these products.
+Added: In June 2023, the FDIC, the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency issued final guidance on managing risks associated with third-party relationships.
+Added: The guidance sets forth considerations and a framework with respect to the management of risks arising from third-party relationships and replaces the federal banking agencies' existing guidance on the topic.
+Added: The guidance broadly applies to business arrangements between a banking organization and a third party, including relationships with fintech entities and bank/fintech sponsorship arrangements.
Changes to consumer protection laws or changes in their interpretation may impede collection efforts or otherwise adversely impact our business practices.
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some credit products and services could be banned in certain states or at the federal level;
−Removed: federal or state bankruptcy or debtor relief laws could offer additional protections to consumers seeking bankruptcy protection, providing a court greater leeway to reduce or discharge amounts owed to us;
+Added: federal or state bankruptcy or debtor relief laws could offer additional protections to consumers seeking bankruptcy protection, providing a court greater leeway to reduce or discharge amounts owed to us; and
a reduction in our ability or willingness to invest in receivables arising under loans to certain consumers, such as military personnel.
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In the event of certain defaults, we may repossess automobiles and sell repossessed automobiles at wholesale auction markets located throughout the U.S.
−Removed: Auction proceeds from these types of sales and other recoveries generally are not sufficient to cover the outstanding balances of the contracts;
−Removed: where we experience these shortfalls, we will experience credit losses.
+Added: Auction proceeds from these types of sales and other recoveries generally are not sufficient to cover the outstanding balances of the contracts; where we experience these shortfalls, we will experience credit losses.
Repossession of automobiles entails the risk of litigation and other claims.
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As a result, the impact of any acquisition or sale on our future performance may not be as favorable as expected and actually may be adverse.
−Removed: Portfolio purchases may cause fluctuations in our reported CaaS segment’s managed receivables data, possibly reducing the usefulness of this data in evaluating our business.
+Added: Portfolio purchases may cause fluctuations in our reported CaaS segment’s managed receivables data, possibly reducing the usefulness of this data in evaluating our business.
Our reported CaaS segment managed receivables data may fluctuate substantially from quarter to quarter as a result of recent and future credit card portfolio acquisitions.
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Other Risks of Our Business
−Removed: COVID-19 has caused severe disruptions in the U.S.
−Removed: economy and may have an adverse impact on our performance, results of operations and access to capital.
+Added: We operate in a highly competitive industry, and our inability to compete successfully would materially and adversely affect our business, results of operations, financial condition, and future prospects.
+Added: We operate in a highly competitive and dynamic industry.
+Added: We face competition from a variety of players, including those who enable transactions and commerce via digital payments and consumer loans.
+Added: Our primary competition consists of facilitators and providers of legacy payment and consumer loan methods, such as credit and debit cards, including those provided by card issuing banks; technology solutions, including those provided by financial technology or payment companies; mobile wallets, such as Apple and PayPal; and pay-over-time solutions providers, including Block and Klarna.
+Added: Consumer lending is a broad and competitive market, and we compete to varying degrees with various platform providers or sources of consumer credit.
+Added: This can include banks, non-bank lenders, including retail-based lenders, and other financial technology companies.
+Added: Some of our competitors, particularly credit issuing banks, are substantially larger than we are and have longer operating histories than we do, which gives those competitors advantages we do not have, such as more diversified products, a broader consumer and merchant base, greater brand recognition and brand loyalty, the ability to reach more consumers, the ability to cross sell their products, operational efficiencies, the ability to cross-subsidize their offerings through their other business lines, more versatile technology platforms, broad-based local distribution capabilities, and lower-cost funding.
+Added: In addition, because many of our competitors are large financial institutions that fund themselves through low-cost insured deposits and continue to own the loans that they originate, they have certain revenue and funding opportunities not available to us.
+Added: Furthermore, our current or potential competitors may be better at developing new products due to their large and experienced data science and engineering teams, who are able to respond more quickly to new technologies.
+Added: Additionally, merchants are increasingly offering other credit and payment options to customers.
+Added: We expect competition to intensify in the future, both as emerging technologies continue to enter the marketplace and as large financial incumbents increasingly seek to innovate the services that they offer to compete with us.
+Added: Technological advances and the continued growth of e-commerce activities have increased consumers’ accessibility to products and services and led to the expansion of competition in digital payment and consumer loan options such as pay-over-time solutions.
+Added: We face competition in areas such as compliance capabilities, commercial financing terms and costs of capital, interest rates and fees (and other financing terms) available to consumers from our bank partners, approval rates, model efficiency, speed and simplicity of loan origination, ease-of-use, marketing expertise, service levels, products and services, technological capabilities and integration, borrower experience, brand and reputation.
+Added: Furthermore, our existing and potential competitors may decide to modify their pricing and business models to compete more directly with us.
+Added: Our ability to compete will also be affected by our ability to provide our bank partners with a commensurate or more extensive suite of products than those offered by our competitors.
+Added: In addition, current or potential competitors, including financial technology lending platforms and existing or potential bank partners, may also acquire or form strategic alliances with one another, which could result in our competitors being able to offer more competitive loan terms due to their access to lower-cost capital.
+Added: Such acquisitions or strategic alliances among our competitors or potential competitors could also make our competitors more adaptable to a rapidly evolving regulatory environment.
+Added: To stay competitive, we may need to increase our regulatory compliance expenditures or our ability to compete may be adversely affected.
+Added: Our industry is driven by constant innovation.
+Added: We utilize machine learning, which is characterized by extensive research efforts and rapid technological progress.
+Added: If we fail to anticipate or respond adequately to technological developments, our ability to operate profitably could suffer.
+Added: Research, data accumulation and development by other companies may result in AI models that are superior to our AI models or result in products superior to those we develop.
+Added: Further, technologies, products or services we develop may not be preferred to any existing or newly-developed technologies, products or services.
+Added: If we are unable to compete with such companies or fail to meet the need for innovation in our industry, the use of our platform could stagnate or substantially decline, or our products could fail to maintain or achieve more widespread market acceptance, which would materially and adversely affect our business, results of operations, financial condition, and future prospects.
+Added: The reaction to COVID-19 caused severe disruptions in the U.S.
+Added: economy and may have further adverse impacts on our performance, results of operations and access to capital.
In March 2020, a national emergency was declared under the National Emergencies Act due to a new strain of coronavirus ("COVID-19").
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and worldwide to mitigate the spread of the virus significantly impacted the macroeconomic environment, including consumer confidence, unemployment and other economic indicators that contribute to consumer spending behavior and demand for credit.
−Removed: More recently, policy responses to the COVID-19 pandemic have, in part, caused, supply chain disruptions, significant inflation and labor shortages.
+Added: More recently, policy responses to COVID-19 have, in part, caused, supply chain disruptions, significant inflation, labor shortages and in turn, rising interest rates.
Our results of operations are impacted by the relative strength of the overall economy.
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Furthermore, to the extent that supply chain disruptions result in deferred purchases, there will be a corresponding decrease in our receivable purchases.
−Removed: We routinely engage in discussions with customers, some of whom have indicated that they have experienced economic hardship due to the COVID-19 pandemic and have requested payment deferral or forbearance or other modifications of their accounts.
−Removed: While we are addressing requests for relief, we may still experience higher instances of default.
−Removed: Additionally, the COVID-19 pandemic could adversely affect our liquidity position and could limit our ability to grow our business or fully execute on our business strategy.
−Removed: Furthermore, the COVID-19 pandemic and resulting economic conditions could negatively impact our access to capital.
−Removed: The COVID-19 pandemic also resulted in us modifying certain business practices, such as transitioning to a distributed work model.
−Removed: We may take further actions as required by government authorities or as we determine to be in the best interests of our employees and consumers.
−Removed: We may experience disruptions due to a number of operational factors, including, but not limited to:
−Removed: increased cyber and payment fraud risk related to COVID-19, as cybercriminals attempt to profit from the disruption, given increased e-commerce and other online activity;
−Removed: challenges to the security, availability and reliability of our information technology platform due to changes to normal operations, including the possibility of one or more clusters of COVID-19 cases affecting our employees or affecting the systems or employees of our partners;
−Removed: an increased volume of borrower and regulatory requests for information and support, or new regulatory requirements, which could require additional resources and costs to address.
−Removed: Even as the COVID-19 pandemic subsides, our business may continue to be unfavorably impacted by the economic turmoil caused by the pandemic.
−Removed: There are no recent comparable events that could serve to indicate the ultimate effect the COVID-19 pandemic may have and, as such, we do not at this time know what the extent of the impact of the COVID-19 pandemic will be on our business.
−Removed: To the extent the COVID-19 pandemic adversely affects our business and financial results, it also may heighten other risks described in this Part I, Item 1A.
−Removed: For additional discussion of the impact of COVID-19 on our business, see additional risk factors included in this Part II, Item 1A, as well as Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
+Added: For additional discussion of the impact of COVID-19 on our business, see additional risk factors included in this Part II, Item 1A, as well as Part I, Item 2 "Management’s Discussion and Analysis of Financial Condition and Results of Operations."
Our business and operations may be negatively affected by rising prices and interest rates.
−Removed: Our financial performance and consumers’
−Removed: ability to repay indebtedness may be affected by uncertain economic conditions, including inflation, government shutdowns and changing interest rates.
+Added: Our financial performance and consumers’ ability to repay indebtedness may be affected by uncertain economic conditions, including inflation, government shutdowns and changing interest rates.
Higher inflation increases the costs of goods and services, reduces consumer spending power and may negatively affect our ability to purchase receivables.
−Removed: In 2022, inflation reached a four-decade high.
−Removed: The Federal Reserve has raised interest rates to combat inflation.
+Added: In 2022, inflation reached a four-decade high and continues to adversely impact the economy.
+Added: The Federal Reserve has raised interest rates to combat inflation.
Increased interest rates may adversely impact the spending levels of consumers and their ability and willingness to borrow money.
Higher interest rates often lead to higher payment obligations, which may reduce the ability of consumers to remain current on their obligations and, therefore, lead to increased delinquencies, defaults, customer bankruptcies and charge-offs, and decreased recoveries, all of which could have an adverse effect on our business.
−Removed: Recently, prices for energy and food have been particularly volatile in light of Russia’s invasion of Ukraine and the resulting trade restrictions and sanctions imposed on Russia by the U.S.
+Added: Over the last two years, prices for energy and food have been particularly volatile in light of Russia’s invasion of Ukraine and the resulting trade restrictions and sanctions imposed on Russia by the U.S.
and other countries.
−Removed: These recent events have increased inflationary pressures.
+Added: These events have increased inflationary pressures.
The potential for government shutdowns due to Congress' failure to enact an appropriations bill could have a negative impact on the nation's economy and adversely impact both our ability to purchase receivables due to lower economic spending levels and our ability to collect on existing receivables as consumers may have temporary or permanent delays in income.
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As a result, our cash flow and ability to service our debt is dependent upon distributions from our subsidiaries.
−Removed: The distribution of subsidiary earnings, or advances or other distributions of funds by subsidiaries to us, all of which are subject to statutory and could be subject to contractual restrictions, are contingent upon the subsidiaries’
−Removed: cash flows and earnings and are subject to various business and debt covenant considerations.
+Added: The distribution of subsidiary earnings, or advances or other distributions of funds by subsidiaries to us, all of which are subject to statutory and could be subject to contractual restrictions, are contingent upon the subsidiaries’ cash flows and earnings and are subject to various business and debt covenant considerations.
We are party to litigation.
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The failure of financial institutions or transactional counterparties could adversely affect our current and projected business operations and our financial condition and results of operations.
−Removed:  During 2023, multiple financial institutions have been closed and placed in receivership. 
+Added: During 2023, multiple financial institutions were closed and placed in receivership.
Although we did not have any funds deposited with the affected banks, we regularly maintain cash balances with other financial institutions in excess of the FDIC insurance limit.
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Any publicized security problems could inhibit the growth of the Internet as a means of conducting commercial transactions.
−Removed: Our ability to service our clients’
−Removed: needs over the Internet would be severely impeded if consumers become unwilling to transmit confidential information online.
+Added: Our ability to service our clients’ needs over the Internet would be severely impeded if consumers become unwilling to transmit confidential information online.
Also, a party that is able to circumvent our security measures could misappropriate proprietary information, cause interruption in our operations, damage our computers or those of our users, or otherwise damage our reputation and business.
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For example, we are subject to the Safeguards guidelines under the Gramm-Leach-Bliley Act.
−Removed: The Safeguards guidelines require that each financial institution develop, implement and maintain a written, comprehensive information security program containing safeguards that are appropriate to the financial institution’s size and complexity, the nature and scope of the financial institution’s activities and the sensitivity of any customer information at issue.
+Added: The Safeguards guidelines require that each financial institution develop, implement and maintain a written, comprehensive information security program containing safeguards that are appropriate to the financial institution’s size and complexity, the nature and scope of the financial institution’s activities and the sensitivity of any customer information at issue.
Broad-ranging data security laws that affect our business also have been adopted by several states.
−Removed: The California Consumer Privacy Act (the “CCPA”) became effective on January 1, 2020.
+Added: The California Consumer Privacy Act (the "CCPA") became effective on January 1, 2020.
The CCPA requires, among other things, covered companies to provide new disclosures to California consumers and afford such consumers with expanded protections and control over the collection, maintenance, use and sharing of personal information.
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The CCPA provides for civil penalties for violations and a private right of action for data breaches.
−Removed: In addition, in November 2020, California voters approved the California Privacy Rights Act of 2020 (the “CPRA”) ballot initiative, which became effective on January 1, 2023.
+Added: In addition, in November 2020, California voters approved the California Privacy Rights Act of 2020 (the "CPRA") ballot initiative, which became effective on January 1, 2023.
The CPRA established the California Privacy Protection Agency to implement and enforce the CCPA and CPRA.
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The most direct impact is likely to be an increase in energy costs, adversely impacting consumers and their ability to incur and repay indebtedness.
−Removed: We elected the fair value option for newly originated assets, effective as of January 1, 2020, and we use estimates in determining the fair value of our loans.
+Added: We elected the fair value option for newly originated assets, effective as of January 1, 2020, and for all remaining assets associated with our private label credit and general purpose credit card platform as of January 1, 2022.
+Added: We use estimates in determining the fair value of our loans.
If our estimates prove incorrect, we may be required to write down the value of these assets, adversely affecting our results of operations.
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Management has processes in place to monitor these judgments and assumptions, but these processes may not ensure that our judgments and assumptions are accurate.
−Removed: Our allowance for uncollectible loans is determined based upon both objective and subjective factors and may not be adequate to absorb credit losses.
+Added: Our allowances for credit losses are determined based upon both objective and subjective factors and may not be adequate to absorb credit losses.
We face the risk that customers will fail to repay their loans in full.
−Removed: Through our analysis of loan performance, delinquency data, charge-off data, economic trends and the potential effects of those economic trends on consumers, we establish an allowance for uncollectible loans, interest and fees receivable as an estimate of the probable losses inherent within those loans, interest and fees receivable that we do not report at fair value.
−Removed: We determine the necessary allowance for uncollectible loans, interest and fees receivable by analyzing some or all of the following unique to each type of receivable pool:
−Removed: historical loss rates;
−Removed: current delinquency and roll-rate trends;
−Removed: vintage analyses based on the number of months an account has been in existence;
−Removed: the effects of changes in the economy on consumers;
−Removed: changes in underwriting criteria;
−Removed: and estimated recoveries.
+Added: Through our analysis of loan performance, delinquency data, charge-off data, economic trends and the potential effects of those economic trends on consumers, we establish allowances for credit losses as an estimate of the expected credit losses inherent within those loans, interest and fees receivable that we do not report at fair value.
+Added: We determine the necessary allowances for credit losses by analyzing some or all of the following attributes unique to each type of receivable pool:
+Added: historical loss rates; current delinquency and roll-rate trends; vintage analyses based on the number of months an account has been in existence; the effects of changes in the economy on consumers; changes in underwriting criteria; and estimated recoveries.
These inputs are considered in conjunction with (and potentially reduced by) any unearned fees and discounts that may be applicable for an outstanding loan receivable.
Actual losses are difficult to forecast, especially if such losses are due to factors beyond our historical experience or control.
−Removed: As a result, our allowance for uncollectible loans may not be adequate to absorb incurred losses or prevent a material adverse effect on our business, financial condition and results of operations.
+Added: As a result, our allowances for credit losses may not be adequate to absorb all credit losses or prevent a material adverse effect on our business, financial condition and results of operations.
Losses are the largest cost as a percentage of revenues across all of our products.
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actual or anticipated fluctuations in our operating results;
−Removed: changes in expectations as to our future financial performance, including financial estimates and projections by Atlanticus, securities analysts and investors;
+Added: changes in expectations as to our future financial performance, including financial estimates and projections by Atlanticus, securities analysts and investors;
the overall financing environment, which is critical to our value;
changes in interest rates;
−Removed: inflation and supply chain disruptions;
−Removed: the operating and stock performance of our competitors;
−Removed: announcements by us or our competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
−Removed: the announcement of enforcement actions or investigations against us or our competitors or other negative publicity relating to us or our industry;
+Added: inflation and supply chain disruptions;
+Added: the operating and stock performance of our competitors;
+Added: announcements by us or our competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
+Added: the announcement of enforcement actions or investigations against us or our competitors or other negative publicity relating to us or our industry;
changes in generally accepted accounting principles in the U.S.
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changes in ownership by executive officers, directors and parties related to them who control a majority of our common stock;
−Removed: additions or departures of key personnel; 
−Removed: the annual yield from distributions on the Series B Preferred Stock as compared to yields on other financial instruments;
−Removed: epidemics and pandemics (such as the COVID-19 pandemic).
−Removed: In addition, the stock markets from time to time experience extreme price and volume fluctuations that may be unrelated or disproportionate to the operating performance of companies.
+Added: additions or departures of key personnel;
+Added: the annual yield from distributions on the Series B preferred stock or interest on the 2026 Senior Notes and the 2029 Senior Notes as compared to yields on other financial instruments; and
+Added: global pandemics (such as the COVID-19 pandemic).
+Added: In addition, the stock markets from time to time experience extreme price and volume fluctuations that may be unrelated or disproportionate to the operating performance of companies.
These broad fluctuations may adversely affect the trading prices of our securities, regardless of our actual operating performance.
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Future sales of shares of common stock or the availability of shares of common stock for future sale, including sales of our common stock in short sale transactions, may have a material adverse effect on the trading price of our common stock.
−Removed: The shares of Series A Convertible Preferred Stock and Series B Preferred Stock are senior obligations, rank prior to our common stock with respect to dividends, distributions and payments upon liquidation and have other terms, such as a redemption right, that could negatively impact the value of shares of our common stock.
−Removed: In December 2019, we issued 400,000 shares of Series A Convertible Preferred Stock.
−Removed: The rights of the holders of our Series A Convertible Preferred Stock with respect to dividends, distributions and payments upon liquidation rank senior to similar obligations to our holders of common stock.
−Removed: Holders of the Series A Convertible Preferred Stock are entitled to receive dividends on each share of such stock equal to 6% per annum on the liquidation preference of $100.
−Removed: The dividends on the Series A Convertible Preferred Stock are cumulative and non-compounding and must be paid before we pay any dividends on the common stock.
−Removed: Further, on and after January 1, 2024, the holders of the Series A Convertible Preferred Stock will have the right to require us to purchase outstanding shares of Series A Convertible Preferred Stock for an amount equal to $100 per share plus any accrued but unpaid dividends.
−Removed: This redemption right could expose us to a liquidity risk if we do not have sufficient cash resources at hand or are not able to find financing on sufficiently attractive terms to comply with our obligations to repurchase the Series A Convertible Preferred Stock upon exercise of such redemption right.
−Removed: In June and July 2021, we issued 3,188,533 shares of Series B Preferred Stock.
−Removed: The rights of the holders of our Series B Preferred Stock with respect to dividends, distributions and payments upon liquidation rank junior to similar obligations to our holders of Series A Convertible Preferred Stock and senior to similar obligations to our holders of common stock.
+Added: The shares of Series A preferred stock and Series B p referred stock are senior obligations, rank prior to our common stock with respect to dividends, distributions and payments upon liquidation and have other terms, such as a redemption right, that could negatively impact the value of shares of our common stock.
+Added: In December 2019, we issued 400,000 shares of Series A preferred stock.
+Added: The rights of the holders of our Series A preferred stock with respect to dividends, distributions and payments upon liquidation rank senior to similar obligations to our holders of common stock.
+Added: Holders of the Series A preferred stock are entitled to receive dividends on each share of such stock equal to 6% per annum on the liquidation preference of $100.
+Added: The dividends on the Series A preferred stock are cumulative and non-compounding and must be paid before we pay any dividends on the common stock.
+Added: Further, the holders of the Series A preferred stock have the right to require us to purchase outstanding shares of Series A preferred stock for an amount equal to $100 per share plus any accrued but unpaid dividends.
+Added: This redemption right could expose us to a liquidity risk if we do not have sufficient cash resources at hand or are not able to find financing on sufficiently attractive terms to comply with our obligations to repurchase the Series A preferred stock upon exercise of such redemption right.
+Added: In June and July 2021, we issued 3,188,533 shares of Series B preferred stock, for net proceeds of approximately $76.5 million after deducting underwriting discounts and commissions, but before deducting expenses and the structuring fee.
+Added: Additionally, the Company has in the past, and may in the future, issue additional shares of Series B preferred stock pursuant to our "at-the-market" offering program.
+Added: The rights of the holders of our Series B preferred stock with respect to dividends, distributions and payments upon liquidation rank junior to similar obligations to our holders of Series A preferred stock and senior to similar obligations to our holders of common stock.
Holders of the Series B preferred stock are entitled to receive dividends on each share of such stock equal to 7.625% per annum on the liquidation preference of $25.00 per share.
The dividends on the Series B preferred stock are cumulative and non-compounding and must be paid before we pay any dividends on the common stock.
−Removed: In the event of our liquidation, dissolution or the winding up of our affairs, the holders of our Series A Convertible Preferred Stock and Series B Preferred Stock have the right to receive a liquidation preference entitling them to be paid out of our assets generally available for distribution to our equity holders and before any payment may be made to holders of our common stock.
−Removed: Our obligations to the holders of Series A Convertible Preferred Stock and Series B Preferred Stock also could limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition and the value of our common stock.
−Removed: Our outstanding Series A Convertible Preferred Stock has anti-dilution protection that, if triggered, could cause substantial dilution to our then-existing holders of common stock, which could adversely affect our stock price.
−Removed: The document governing the terms of our outstanding Series A Convertible Preferred Stock contains anti-dilution provisions to benefit the holders of such stock.
−Removed: As a result, if we, in the future, issue common stock or other derivative securities, subject to specified exceptions, for a per share price less than the then existing conversion price of the Series A Convertible Preferred Stock, an adjustment to the then current conversion price would occur.
+Added: In the event of our liquidation, dissolution or the winding up of our affairs, the holders of our Series A preferred stock and Series B preferred stock have the right to receive a liquidation preference entitling them to be paid out of our assets generally available for distribution to our equity holders and before any payment may be made to holders of our common stock.
+Added: Our obligations to the holders of Series A preferred stock and Series B preferred stock also could limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition and the value of our common stock.
+Added: Our outstanding Series A preferred stock has anti-dilution protection that, if triggered, could cause substantial dilution to our then-existing holders of common stock, which could adversely affect our stock price.
+Added: The document governing the terms of our outstanding Series A preferred stock contains anti-dilution provisions to benefit the holders of such stock.
+Added: As a result, if we, in the future, issue common stock or other derivative securities, subject to specified exceptions, for a per share price less than the then existing conversion price of the Series A preferred stock, an adjustment to the then current conversion price would occur.
This reduction in the conversion price could result in substantial dilution to our then-existing holders of common stock, adversely affecting the price of our common stock.
In the past, we have not paid cash dividends on our common stock on a regular basis, and an increase in the market price of our common stock, if any, may be the sole source of gain on an investment in our common stock.
−Removed: With the exception of dividends payable on our Series A Convertible Preferred Stock and Series B Preferred Stock, we currently plan to retain any future earnings for use in the operation and expansion of our business and may not pay any dividends on our common stock in the foreseeable future.
+Added: With the exception of dividends payable on our Series A preferred stock and Series B preferred stock, we currently plan to retain any future earnings for use in the operation and expansion of our business and may not pay any dividends on our common stock in the foreseeable future.
The declaration and payment of all future dividends on our common stock, if any, will be at the sole discretion of our board of directors, which retains the right to change our dividend policy at any time.
−Removed: Any decision by our board of directors to declare and pay dividends in the future will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions, restrictions on dividends imposed by the documents governing the terms of the Series A Convertible Preferred Stock and Series B Preferred Stock and other factors that our board of directors may deem relevant.
+Added: Any decision by our board of directors to declare and pay dividends in the future will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions, restrictions on dividends imposed by the documents governing the terms of the Series A preferred stock and Series B preferred stock and other factors that our board of directors may deem relevant.
Consequently, appreciation in the market price of our common stock, if any, may be the sole source of gain on an investment in our common stock for the foreseeable future.
−Removed: Holders of the Series A Convertible Preferred Stock and Series B Preferred Stock are entitled to receive dividends on such stock that are cumulative and non-compounding and must be paid before we pay any dividends on the common stock.
+Added: Holders of the Series A preferred stock and Series B preferred stock are entitled to receive dividends on such stock that are cumulative and non-compounding and must be paid before we pay any dividends on the common stock.
We have the ability to issue additional preferred stock, warrants, convertible debt and other securities without shareholder approval.
Our common stock may be subordinate to additional classes of preferred stock issued in the future in the payment of dividends and other distributions made with respect to common stock, including distributions upon liquidation or dissolution.
−Removed: Our Amended and Restated Articles of Incorporation (the "Articles of Incorporation") permit our board of directors to issue preferred stock without first obtaining shareholder approval, which we did in December 2019 when we issued the Series A Convertible Preferred Stock and in June and July 2021 when we issued the Series B Preferred Stock.
+Added: Our Amended and Restated Articles of Incorporation (the "Articles of Incorporation") permit our board of directors to issue preferred stock without first obtaining shareholder approval, which we did in December 2019 when we issued the Series A preferred stock and in June and July 2021 when we issued the Series B preferred stock.
+Added: Additionally, the Company has in the past, and may in the future, issue additional shares of Series B preferred stock pursuant to our "at-the-market" offering program.
If we issue additional classes of preferred stock, these additional securities may have dividend or liquidation preferences senior to the common stock.
−Removed: If we issue additional classes of convertible preferred stock, a subsequent conversion may dilute the current common shareholders’
+Added: If we issue additional classes of convertible preferred stock, a subsequent conversion may dilute the current common shareholders’ interests.
We have similar abilities to issue convertible debt, warrants and other equity securities.
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Accordingly, this concentration of ownership may have the effect of delaying, deferring or preventing a change of control of us, impede a merger, consolidation, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, adversely affecting the market price of our common stock.
−Removed: The Series B Preferred Stock rank junior to our Series A Convertible Preferred Stock and all of our indebtedness and other liabilities and are effectively junior to all indebtedness and other liabilities of our subsidiaries.
−Removed: In the event of our bankruptcy, liquidation, dissolution or winding-up of our affairs, our assets will be available to pay obligations on the Series B Preferred Stock only after all of our indebtedness and other liabilities have been paid and the liquidation preference of the Series A Convertible Preferred Stock has been satisfied.
−Removed: The rights of holders of the Series B Preferred Stock to participate in the distribution of our assets will rank junior to the prior claims of our current and future creditors, the Series A Convertible Preferred Stock and any future series or class of preferred stock we may issue that ranks senior to the Series B Preferred Stock.
−Removed: Our Articles of Incorporation authorize us to issue up to 10,000,000 shares of preferred stock in one or more series on terms determined by our board of directors, and as of September 30, 2023 we have outstanding 400,000 shares of Series A Convertible Preferred Stock and 3,256,561 shares of Series B Preferred Stock.
−Removed: We may issue up to 6,343,439 additional shares of preferred stock.
+Added: The Series B preferred stock rank junior to our Series A preferred stock and all of our indebtedness and other liabilities and are effectively junior to all indebtedness and other liabilities of our subsidiaries.
+Added: In the event of our bankruptcy, liquidation, dissolution or winding-up of our affairs, our assets will be available to pay obligations on the Series B preferred stock only after all of our indebtedness and other liabilities have been paid and the liquidation preference of the Series A preferred stock has been satisfied.
+Added: The rights of holders of the Series B preferred stock to participate in the distribution of our assets will rank junior to the prior claims of our current and future creditors, the Series A preferred stock and any future series or class of preferred stock we may issue that ranks senior to the Series B preferred stock.
+Added: Our Articles of Incorporation authorize us to issue up to 10,000,000 shares of preferred stock in one or more series on terms determined by our board of directors, and as of March 31, 2024 we had outstanding 400,000 shares of Series A preferred stock and 3,300,704 shares of Series B preferred stock.
+Added: As of March 31, 2024, we could issue up to 6,299,296 additional shares of preferred stock.
In addition, the Series B preferred stock effectively ranks junior to all existing and future indebtedness and other liabilities of (as well as any preferred equity interests held by others in) our existing subsidiaries and any future subsidiaries.
Our existing subsidiaries are, and any future subsidiaries would be, separate legal entities and have no legal obligation to pay any amounts to us in respect of dividends due on the Series B preferred stock.
−Removed: If we are forced to liquidate our assets to pay our creditors and holders of our Series A Convertible Preferred Stock, we may not have sufficient assets to pay amounts due on any or all of the Series B Preferred Stock then outstanding.
+Added: If we are forced to liquidate our assets to pay our creditors and holders of our Series A preferred stock, we may not have sufficient assets to pay amounts due on any or all of the Series B preferred stock then outstanding.
We and our subsidiaries have incurred and may in the future incur substantial amounts of debt and other obligations that will rank senior to the Series B preferred stock.
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We are allowed to issue additional shares of Series B preferred stock and additional series of preferred stock that would rank on a parity with the Series B preferred stock as to dividend payments and rights upon our liquidation, dissolution or winding up of our affairs pursuant to our Articles of Incorporation and the Amended and Restated Articles of Amendment Establishing the Series B preferred stock without any vote of the holders of the Series B preferred stock.
−Removed: Our Articles of Incorporation authorize us to issue up to 10,000,000 shares of preferred stock in one or more series on terms determined by our board of directors, and as of September 30, 2023 we have outstanding 400,000 shares of Series A Convertible Preferred Stock and 3,256,561 shares of Series B Preferred Stock.
−Removed: We may issue up to 6,343,439 additional shares of preferred stock.
+Added: Our Articles of Incorporation authorize us to issue up to 10,000,000 shares of preferred stock in one or more series on terms determined by our board of directors, and as of March 31, 2024 we had outstanding 400,000 shares of Series A preferred stock and 3,300,704 shares of Series B preferred stock.
+Added: As of March 31, 2024, we could issue up to 6,299,296 additional shares of preferred stock.
The issuance of additional shares of Series B preferred stock and additional series of parity preferred stock could have the effect of reducing the amounts available to the holders of Series B preferred stock upon our liquidation or dissolution or the winding up of our affairs.
14 unchanged sentences
In addition, those features of the Series B preferred stock may have the effect of inhibiting a third party from making an acquisition proposal for our Company or of delaying, deferring or preventing a change of control of the Company under circumstances that otherwise could provide the holders of our common stock and Series B preferred stock with the opportunity to realize a premium over the then-current market price or that shareholders may otherwise believe is in their best interests.
−Removed: Holders of Series B Preferred Stock may be unable to use the dividends-received deduction and may not be eligible for the preferential tax rates applicable to “qualified dividend income.”
−Removed: Distributions paid to corporate U.S.
+Added: Holders of Series B preferred stock may be unable to use the dividends-received deduction and may not be eligible for the preferential tax rates applicable to "qualified dividend income." Distributions paid to corporate U.S.
holders on the Series B preferred stock may be eligible for the dividends-received deduction, and distributions paid to non-corporate U.S.
−Removed: holders on the Series B Preferred Stock may be subject to tax at the preferential tax rates applicable to “qualified dividend income,”
−Removed: if we have current or accumulated earnings and profits, as determined for U.S.
+Added: holders on the Series B preferred stock may be subject to tax at the preferential tax rates applicable to "qualified dividend income," if we have current or accumulated earnings and profits, as determined for U.S.
federal income tax purposes.
4 unchanged sentences
holders would be unable to use the dividends-received deduction and non-corporate U.S.
−Removed: holders may not be eligible for the preferential tax rates applicable to “qualified dividend income”
−Removed: and generally would be required to reduce their tax basis in the Series B Preferred Stock by the extent to which the distribution is not treated as a dividend.
+Added: holders may not be eligible for the preferential tax rates applicable to "qualified dividend income" and generally would be required to reduce their tax basis in the Series B preferred stock by the extent to which the distribution is not treated as a dividend.
Holders of Series B preferred stock may be subject to tax if we make or fail to make certain adjustments to the conversion rate of the Series B preferred stock even though such holders do not receive a corresponding cash dividend.
6 unchanged sentences
Treasury issued proposed income tax regulations in regard to the taxability of changes in conversion rights that will apply to the Series B preferred stock when published in final form and may be applied to us before final publication in certain instances.
−Removed: The indenture governing the 6.125% Senior Notes due 2026 (the “Senior Notes”) does not prohibit us from incurring additional indebtedness.
−Removed: If we incur any additional indebtedness that ranks equally with the Senior Notes, the holders of that debt will be entitled to share ratably with holders of the Senior Notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization or dissolution.
−Removed: This may have the effect of reducing the amount of proceeds paid to holders of Senior Notes.
+Added: The indenture governing the 2026 Senior Notes and the 2029 Senior Notes does not prohibit us from incurring additional indebtedness.
+Added: If we incur any additional indebtedness that ranks equally with the 2026 Senior Notes and 2029 Senior Notes, the holders of that debt will be entitled to share ratably with holders of the 2026 Senior Notes and 2029 Senior Notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization or dissolution.
+Added: This may have the effect of reducing the amount of proceeds paid to holders of 2026 Senior Notes and 2029 Senior Notes.
Incurrence of additional debt would also further reduce the cash available to invest in operations, as a result of increased debt service obligations.
If new debt is added to our current debt levels, the related risks that we now face could intensify.
−Removed: Our level of indebtedness could have important consequences to holders of the Senior Notes, because:
−Removed: it could affect our ability to satisfy our financial obligations, including those relating to the Senior Notes;
−Removed: a substantial portion of our cash flows from operations would have to be dedicated to interest and principal payments and may not be available
−Removed: for operations, capital expenditures, expansion, acquisitions or general corporate or other purposes;
+Added: Our level of indebtedness could have important consequences to holders of the 2026 Senior Notes and 2029 Senior Notes, because:
+Added: it could affect our ability to satisfy our financial obligations, including those relating to the 2026 Senior Notes and 2029 Senior Notes;
+Added: a substantial portion of our cash flows from operations would have to be dedicated to interest and principal payments and may not be available for operations, capital expenditures, expansion, acquisitions or general corporate or other purposes;
it may impair our ability to obtain additional debt or equity financing in the future;
it may limit our ability to refinance all or a portion of our indebtedness on or before maturity;
−Removed: it may limit our flexibility in planning for, or reacting to, changes in our business and industry;
+Added: it may limit our flexibility in planning for, or reacting to, changes in our business and industry; and
it may make us more vulnerable to downturns in our business, our industry or the economy in general.
−Removed: Our operations may not generate sufficient cash to enable us to service our debt.
−Removed: If we fail to make a payment on the Senior Notes, we could be in default on the Senior Notes, and this default could cause us to be in default on other indebtedness, to the extent outstanding.
+Added: Our operations may not generate sufficient cash to enable us to service our debt.
+Added: If we fail to make a payment on the 2026 Senior Notes and 2029 Senior Notes, we could be in default on the 2026 Senior Notes and 2029 Senior Notes, and this default could cause us to be in default on other indebtedness, to the extent outstanding.
Conversely, a default under any other indebtedness, if not waived, could result in acceleration of the debt outstanding under the related agreement and entitle the holders thereof to bring suit for the enforcement thereof or exercise other remedies provided thereunder.
3 unchanged sentences
Even if new financing were then available, it may not be on terms that are acceptable to us.
−Removed: However, no event of default under the Senior Notes would result from a default or acceleration of, or suit, other exercise of remedies or collection proceeding by holders of, our other outstanding debt, if any.
−Removed: As a result, all or substantially all of our assets may be used to satisfy claims of holders of our other outstanding debt, if any, without the holders of the Senior Notes having any rights to such assets.
−Removed: The Senior Notes are unsecured and therefore are effectively subordinated to any secured indebtedness that we currently have or that we may incur in the future.
−Removed: The Senior Notes are not secured by any of our assets or any of the assets of our subsidiaries.
−Removed: As a result, the Senior Notes are effectively subordinated to any secured indebtedness that we or our subsidiaries have currently outstanding or may incur in the future to the extent of the value of the assets securing such indebtedness.
−Removed: The indenture governing the Senior Notes does not prohibit us or our subsidiaries from incurring additional secured (or unsecured) indebtedness in the future.
−Removed: In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness and may consequently receive payment from these assets before they may be used to pay other creditors, including the holders of the Senior Notes.
−Removed: The Senior Notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries.
−Removed: The Senior Notes are obligations exclusively of Atlanticus and not of any of our subsidiaries.
−Removed: None of our subsidiaries is a guarantor of the Notes, and the Notes are not required to be guaranteed by any subsidiaries we may acquire or create in the future.
−Removed: Therefore, in any bankruptcy, liquidation or similar proceeding, all claims of creditors (including trade creditors) of our subsidiaries will have priority over our equity interests in such subsidiaries (and therefore the claims of our creditors, including holders of the Senior Notes) with respect to the assets of such subsidiaries.
+Added: However, no event of default under the 2026 Senior Notes and 2029 Senior Notes would result from a default or acceleration of, or suit, other exercise of remedies or collection proceeding by holders of, our other outstanding debt, if any.
+Added: As a result, all or substantially all of our assets may be used to satisfy claims of holders of our other outstanding debt, if any, without the holders of the 2026 Senior Notes and 2029 Senior Notes having any rights to such assets.
+Added: The 2026 Senior Notes and 2029 Senior Notes are unsecured and therefore are effectively subordinated to any secured indebtedness that we currently have or that we may incur in the future.
+Added: The 2026 Senior Notes and 2029 Senior Notes are not secured by any of our assets or any of the assets of our subsidiaries.
+Added: As a result, the 2026 Senior Notes and 2029 Senior Notes are effectively subordinated to any secured indebtedness that we or our subsidiaries have currently outstanding or may incur in the future to the extent of the value of the assets securing such indebtedness.
+Added: The indenture governing the 2026 Senior Notes and 2029 Senior Notes does not prohibit us or our subsidiaries from incurring additional secured (or unsecured) indebtedness in the future.
+Added: In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness and may consequently receive payment from these assets before they may be used to pay other creditors, including the holders of the 2026 Senior Notes and 2029 Senior Notes.
+Added: The 2026 Senior Notes and 2029 Senior Notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries.
+Added: The 2026 Senior Notes and 2029 Senior Notes are obligations exclusively of Atlanticus and not of any of our subsidiaries.
+Added: None of our subsidiaries is a guarantor of the 2026 Senior Notes and 2029 Senior Notes, and the 2026 Senior Notes and 2029 Senior Notes are not required to be guaranteed by any subsidiaries we may acquire or create in the future.
+Added: Therefore, in any bankruptcy, liquidation or similar proceeding, all claims of creditors (including trade creditors) of our subsidiaries will have priority over our equity interests in such subsidiaries (and therefore the claims of our creditors, including holders of the 2026 Senior Notes and 2029 Senior Notes) with respect to the assets of such subsidiaries.
Even if we are recognized as a creditor of one or more of our subsidiaries, our claims would still be effectively subordinated to any security interests in the assets of any such subsidiary and to any indebtedness or other liabilities of any such subsidiary senior to our claims.
−Removed: Consequently, the Senior Notes are structurally subordinated to all indebtedness and other liabilities (including trade payables) of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish as financing vehicles or otherwise.
−Removed: The indenture governing the Senior Notes does not prohibit us or our subsidiaries from incurring additional indebtedness in the future or granting liens on our assets or the assets of our subsidiaries to secure any such additional indebtedness.
+Added: Consequently, the 2026 Senior Notes and 2029 Senior Notes are structurally subordinated to all indebtedness and other liabilities (including trade payables) of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish as financing vehicles or otherwise.
+Added: The indenture governing the 2026 Senior Notes and 2029 Senior Notes does not prohibit us or our subsidiaries from incurring additional indebtedness in the future or granting liens on our assets or the assets of our subsidiaries to secure any such additional indebtedness.
In addition, future debt and security agreements entered into by our subsidiaries may contain various restrictions, including restrictions on payments by our subsidiaries to us and the transfer by our subsidiaries of assets pledged as collateral.
−Removed: The indenture governing the Senior Notes contains limited protection for holders of the Senior Notes.
−Removed: The indenture under which the Senior Notes were issued offers limited protection to holders of the Senior Notes.
−Removed: The terms of the indenture and the Senior Notes do not restrict our or any of our subsidiaries’
−Removed: ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have an adverse impact on the Senior Notes.
−Removed: In particular, the terms of the indenture and the Senior Notes does not place any restrictions on our or our subsidiaries’
−Removed: issue debt securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the Senior Notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the Senior Notes to the extent of the value of the assets securing such indebtedness or other obligations, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore would be structurally senior to the Senior Notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in our subsidiaries and therefore rank structurally senior to the Senior Notes with respect to the assets of our subsidiaries;
−Removed: pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities subordinated in right of payment to the Senior Notes;
−Removed: sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);
−Removed: enter into transactions with affiliates;
−Removed: create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions;
−Removed: make investments;
+Added: The indenture governing the 2026 Senior Notes and 2029 Senior Notes contains limited protection for holders of the 2026 Senior Notes and 2029 Senior Notes.
+Added: The indenture under which the 2026 Senior Notes and 2029 Senior Notes were issued offers limited protection to holders of the 2026 Senior Notes and 2029 Senior Notes.
+Added: The terms of the indenture and the 2026 Senior Notes and 2029 Senior Notes do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have an adverse impact on the 2026 Senior Notes and 2029 Senior Notes.
+Added: In particular, the terms of the indenture and the 2026 Senior Notes and 2029 Senior Notes do not place any restrictions on our or our subsidiaries’ ability to:
+Added: issue debt securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the 2026 Senior Notes and 2029 Senior Notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the 2026 Senior Notes and 2029 Senior Notes to the extent of the value of the assets securing such indebtedness or other obligations, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore would be structurally senior to the 2026 Senior Notes and 2029 Senior Notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in our subsidiaries and therefore rank structurally senior to the 2026 Senior Notes and 2029 Senior Notes with respect to the assets of our subsidiaries;
+Added: pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities subordinated in right of payment to the 2026 Senior Notes and 2029 Senior Notes;
+Added: sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);
+Added: enter into transactions with affiliates;
+Added: create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions;
+Added: make investments; or
create restrictions on the payment of dividends or other amounts to us from our subsidiaries.
−Removed: In addition, the indenture does not include any protection against certain events, such as a change of control, a leveraged recapitalization or “going private”
−Removed: transaction (which may result in a significant increase of our indebtedness levels), restructuring or similar transactions.
−Removed: Furthermore, the terms of the indenture and the Notes does not protect holders of the Senior Notes in the event that we experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, as they do not require that we or our subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity.
−Removed: Also, an event of default or acceleration under our other indebtedness would not necessarily result in an “event of default”
−Removed: under the Senior Notes.
−Removed: Our ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the indenture may have important consequences for holders of the Senior Notes, including making it more difficult for us to satisfy our obligations with respect to the Senior Notes or negatively affecting the trading value of the Senior Notes.
−Removed: Other debt we issue or incur in the future could contain more protections for its holders than the indenture and the Senior Notes, including additional covenants and events of default.
−Removed: The issuance or incurrence of any such debt with incremental protections could affect the market for and trading levels and prices of the Senior Notes.
−Removed: We may not be able to generate sufficient cash to service all of our debt, and may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful.
+Added: In addition, the indenture does not include any protection against certain events, such as a change of control, a leveraged recapitalization or "going private" transaction (which may result in a significant increase of our indebtedness levels), restructuring or similar transactions.
+Added: Furthermore, the terms of the indenture and the 2026 Senior Notes and 2029 Senior Notes do not protect holders of the 2026 Senior Notes and 2029 Senior Notes in the event that we experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, as they do not require that we or our subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity.
+Added: Also, an event of default or acceleration under our other indebtedness would not necessarily result in an "event of default" under the 2026 Senior Notes and 2029 Senior Notes.
+Added: Our ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the indenture may have important consequences for holders of the 2026 Senior Notes and 2029 Senior Notes, including making it more difficult for us to satisfy our obligations with respect to the 2026 Senior Notes and 2029 Senior Notes or negatively affecting the trading value of the 2026 Senior Notes and 2029 Senior Notes.
+Added: Other debt we issue or incur in the future could contain more protections for its holders than the indenture and the 2026 Senior Notes and 2029 Senior Notes, including additional covenants and events of default.
+Added: The issuance or incurrence of any such debt with incremental protections could affect the market for and trading levels and prices of the 2026 Senior Notes and 2029 Senior Notes.
+Added: We may not be able to generate sufficient cash to service all of our debt, and may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful.
Our ability to make scheduled payments on, or to refinance our obligations under, our debt will depend on our financial and operating performance and that of our subsidiaries, which, in turn, will be subject to prevailing economic and competitive conditions and to financial and business factors, many of which may be beyond our control.
5 unchanged sentences
We may not be able to consummate those sales, or if we do, at an opportune time, the proceeds that we realize may not be adequate to meet debt service obligations when due.
−Removed: Repayment of our indebtedness, to a certain degree, is also dependent on the generation of cash flows by our subsidiaries (none of which are guarantors of the Senior Notes) and their ability to make such cash available to us, by dividend, loan, debt repayment, or otherwise.
+Added: Repayment of our indebtedness, to a certain degree, is also dependent on the generation of cash flows by our subsidiaries (none of which are guarantors of the 2026 Senior Notes and 2029 Senior Notes) and their ability to make such cash available to us, by dividend, loan, debt repayment, or otherwise.
Our subsidiaries may not be able to, or be permitted to, make distributions or other payments to enable us to make payments in respect of our indebtedness.
2 unchanged sentences
In the event that we do not receive distributions or other payments from our subsidiaries, we may be unable to make required payments on our indebtedness.
−Removed: An increase in market interest rates could result in a decrease in the value of the Senior Notes.
+Added: An increase in market interest rates could result in a decrease in the value of the 2026 Senior Notes and 2029 Senior Notes.
In general, as market interest rates rise, notes bearing interest at a fixed rate decline in value.
−Removed: Consequently, if market interest rates increase, the market value of the Senior Notes may decline.
+Added: Consequently, if market interest rates increase, the market value of the 2026 Senior Notes and 2029 Senior Notes may decline.
We may issue additional notes.
−Removed: Under the terms of the indenture governing the Senior Notes, we may from time to time without notice to, or the consent of, the holders of the Senior Notes, create and issue additional notes which may rank equally with the Senior Notes.
−Removed: If any such additional notes are not fungible with the Senior Notes initially offered hereby for U.S.
+Added: Under the terms of the indenture governing the 2026 Senior Notes and 2029 Senior Notes, we may from time to time without notice to, or the consent of, the holders of the 2026 Senior Notes and 2029 Senior Notes, create and issue additional notes which may rank equally with the 2026 Senior Notes and 2029 Senior Notes.
+Added: If any such additional notes are not fungible with the 2026 Senior Notes and 2029 Senior Notes initially offered hereby for U.S.
federal income tax purposes, such additional notes will have one or more separate CUSIP numbers.
−Removed: The rating for the Senior Notes could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.
+Added: The ratings for the 2026 Senior Notes and 2029 Senior Notes could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.
Ratings only reflect the views of the issuing rating agency or agencies and such ratings could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.
−Removed: A rating is not a recommendation to purchase, sell or hold the Senior Notes.
−Removed: Ratings do not reflect market prices or suitability of a security for a particular investor and the rating of the Senior Notes may not reflect all risks related to us and our business, or the structure or market value of the Senior Notes.
+Added: A rating is not a recommendation to purchase, sell or hold the 2026 Senior Notes and 2029 Senior Notes.
+Added: Ratings do not reflect market prices or suitability of a security for a particular investor and the ratings of the 2026 Senior Notes and 2029 Senior Notes may not reflect all risks related to us and our business, or the structure or market value of the 2026 Senior Notes and 2029 Senior Notes.
We may elect to issue other securities for which we may seek to obtain a rating in the future.
−Removed: If we issue other securities with a rating, such ratings, if they are lower than market expectations or are subsequently lowered or withdrawn, could adversely affect the market for or the market value of the Senior Notes.
+Added: If we issue other securities with a rating, such ratings, if they are lower than market expectations or are subsequently lowered or withdrawn, could adversely affect the market for or the market value of the 2026 Senior Notes and 2029 Senior Notes.
Note Regarding Risk Factors
7 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.