3 unchanged sentences
The following is a description of the important risk factors that may affect our business.
−Removed: If any of these risks were to actually occur, our business, financial condition or results of operations could be materially adversely affected.
+Added: If any of these risks were to occur, our business, financial condition or results of operations could be materially adversely affected.
Additional risks and uncertainties not currently known to us or that we currently consider to be immaterial may also materially adversely affect our business, financial condition or results of operations.
−Removed: We have identified a material weakness in our internal control over financial reporting that, if not effectively remediated, could result in material misstatements in our financial statements.
−Removed: As described in "Part II, Item 9A — Controls and Procedures," we identified and evaluated certain deficiencies in our IT general controls in the second quarter of fiscal 2019, and have concluded that those deficiencies, collectively, represent a material weakness in our internal control over financial reporting.
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: As a result of this material weakness, management has concluded that our disclosure controls and procedures were not effective as of September 30, 2019.
−Removed: As described in "Part II, Item 9A - Controls and Procedures," management believes it is taking the appropriate steps to remediate the underlying ITGC deficiencies, including allowing the controls to operate for a time period to produce sufficient testing sample sizes.
−Removed: If our remediation efforts are insufficient, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results, which could materially and adversely affect our business, results of operations and financial condition, restrict our ability to access the capital markets, require us to expend significant resources to correct the deficiencies, subject us to fines, penalties or judgments, harm our reputation or otherwise cause a decline in investor confidence and the market value of our publicly traded Class A Non-Voting Common Stock (“Class A Common Stock”).
+Added: Company Specific Risks
+Added: As a result of the current COVID-19 pandemic, we incurred operating losses in the fourth quarter of fiscal 2020 and expect those operating losses to continue into fiscal 2021.
+Added: The outbreak of COVID-19 began affecting our operations in March 2020.
+Added: Governmental fiscal stimulus response, stay-at-home orders and business restrictions, health agency guidance regarding social distancing and public perceptions of the risks associated with the COVID-19 pandemic have resulted in a reduction in the demand for pawn loans with a resulting significant decline in pawn loan balances.
+Added: See “Part II, Item 7 — Management’s Discussion and Analysis of Results of Operations and Financial Condition — Impact of COVID-19.” The decline in pawn loan balances negatively impacted our financial performance during the third and fourth quarters of fiscal 2020.
+Added: We expect the impact of the pandemic, and the recovery therefrom, will continue to adversely affect our net revenues and earnings in fiscal 2021.
+Added: A prolonged pandemic and recovery may impact our financial condition, results of operations and liquidity in future periods.
+Added: The extent of the impact is dependent upon a number of factors, including the longevity and severity of the pandemic, the pace of business reopenings and rebound, the impact of government responses and the degree to which customer behaviors return to historical norms.
+Added: Failure to sustain focus on internal controls could adversely affect our business, results of operations and financial condition.
+Added: As described in "Part II, Item 9A — Controls and Procedures," we identified and evaluated certain deficiencies in our IT general controls in the second quarter of fiscal 2019, and concluded those deficiencies, collectively, represented a material weakness in our internal control over financial reporting.
+Added: During the fourth quarter of fiscal 2020, we completed our efforts to remediate the underlying deficiencies, and have concluded that our disclosure controls and procedures and our internal control over financial reporting are effective as of September 30, 2020.
+Added: If we do not sustain our focus on internal controls, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results,
+Added: which could materially and adversely affect our business, results of operations and financial condition, restrict our ability to access the capital markets, require us to expend significant resources to correct the deficiencies, subject us to fines, penalties or judgments, harm our reputation or otherwise cause a decline in investor confidence and the market value of our publicly traded Class A Non-Voting Common Stock (“Class A Common Stock”).
Changes in, or failure to comply with, laws and regulations affecting our products and services could have a material adverse effect on our operations and financial performance.
16 unchanged sentences
Further, as discussed below, areas in Texas and Florida where we have significant operations are particularly susceptible to hurricane and tropical storm activity.
−Removed: We have significant operations in Latin America, and changes in the business, regulatory, political or social climate could impact our operations there, which could adversely affect our results of operations and growth plans.
−Removed: We own and operate a significant number of pawn stores in Latin America (primarily Mexico, but also Guatemala, El Salvador, Honduras and Peru).
−Removed: Further, our growth plans include potential expansion in those countries as well as potentially other countries in Latin America.
−Removed: Doing business in those countries exposes us to risks related to political instability, corruption, economic volatility, drug cartel and gang-related violence, social unrest including riots and looting, tax and foreign investment policies, public safety and security concerns, and uncertain application of laws and regulations.
−Removed: Consequently, actions or events in any of those countries that are beyond our control could restrict our ability to operate there or otherwise adversely affect the profitability of those operations.
−Removed: Furthermore, changes in the business, regulatory or political climate in any of those countries, or significant fluctuations in currency exchange rates, could affect our ability to expand or continue our operations there, which could have a material adverse impact on our prospects, results of operations and cash flows.
−Removed: For a description of the current regulatory environment in the Latin American countries in which we operate, see “Mexico Regulations” and “Other Latin America Regulations” under “Part I, Item 1 — Business — Regulation.”
A significant or sudden decrease in gold values or the volume of gold transactions may have a material impact on our earnings and financial position.
4 unchanged sentences
however, a significant decline in gold values or gold volumes could result in decreases in sales, sales margins, pawn loan balances and pawn service charges.
−Removed: A significant change in foreign currency exchange rates could have a material adverse impact on our earnings and financial position.
−Removed: We have foreign operations in Latin America (Mexico, Guatemala, Honduras and Peru) and Canada, and an equity investment in Australia.
−Removed: Our assets and investments in, and earnings and dividends from each of these countries must be translated to U.S.
−Removed: dollars from their respective functional currencies.
−Removed: A significant weakening of any of these foreign currencies could result in lower assets and earnings in U.S.
−Removed: dollars, resulting in a potentially material adverse impact on our financial position, results of operations and cash flows.
Fluctuations in our sales, pawn loan balances, sales margins and pawn redemption rates could have a material adverse impact on our operating results.
6 unchanged sentences
Failure to achieve our expansion goals could adversely affect our prospects, future results of operations and future cash flows.
−Removed: Our development of a digital platform to provide transaction and lending services, and the commercialization of that platform, may not be successful.
−Removed: We are investing in the design and development of a digital platform to enhance our relationships with customers and provide them access to a broader range of financial products and services.
−Removed: There can be no assurance that our efforts to develop and launch such a digital platform will be successful or, if launched, that the platform will be accepted by existing customers or attract new customers.
+Added: Our development of a digital platform, and the commercialization of that platform, may not be successful.
+Added: We have invested in the design and development of a digital platform to enhance our relationships with customers and provide them access to a broader range of financial products and services.
+Added: There can be no assurance that our efforts to develop and launch such a digital platform will be successful or that the platform will be accepted by existing customers or attract new customers.
Consequently, we may not realize the expected return on our investment.
−Removed: Our continued success is dependent on our ability to recruit, hire, retain and motivate talented executives and other key team members.
−Removed: To remain competitive, sustain our success over the long-term and realize our strategic goals, we need to attract, hire, retain and motivate talented executives and other key team members to fill existing positions and reduce our succession risks.
−Removed: If our recruitment and retention programs (including compensation programs) are not viewed as competitive, or we fail to develop and implement appropriate succession plans for key executive positions, our results of operations, as well as our ability to achieve our long-term strategic goals, will be adversely affected.
−Removed: Our ability to collect the remaining amounts owed under the Grupo Finmart promissory notes is dependent on the success and performance of Grupo Finmart and its parent company, AlphaCredit, and we continue to have limited indemnity obligations to AlphaCredit for pre-closing taxes.
−Removed: In connection with the completion of the sale of our 94%-owned subsidiary, Prestaciones Finmart, S.A.P.I.
+Added: We continue to have limited indemnity obligations to AlphaCredit for pre-closing taxes.
+Added: Under the terms of the Purchase Agreement related to the sale of our 94%-owned subsidiary, Prestaciones Finmart, S.A.P.I.
de C.V., SOFOM, E.N.R.
("Grupo Finmart") to Alpha Holding, S.A.
−Removed: (“AlphaCredit”) in September 2016, we received two “Parent Loan Notes” in the original principal amount of $60.2 million.
−Removed: As of September 30, 2019 , the outstanding principal balance on the Parent Loan Notes had been fully repaid by Grupo Finmart.
−Removed: As of that date, Grupo Finmart remained obligated to pay approximately $8.0 million of deferred compensation fee due to us in fiscal 2020.
−Removed: Our ability to recover the remaining amounts due under the Parent Loan Notes is dependent on the success and performance of the business of Grupo Finmart (as primary obligor) and its parent AlphaCredit (as guarantor).
−Removed: To the extent that Grupo Finmart and AlphaCredit are unable to repay these amounts, our assets, financial performance and cash flows would be adversely affected.
−Removed: Under the terms of the Purchase Agreement relating to the sale of Grupo Finmart, we remain obligated to indemnify AlphaCredit for any “pre-closing taxes” (i.e., tax obligations arising from the Grupo Finmart business that are attributable to periods prior to the completion of the sale in September 2016).
+Added: ( “AlphaCredit”) in September 2016, we remain obligated to indemnify AlphaCredit for any “pre-closing taxes” (i.e., tax obligations arising from the Grupo Finmart business that are attributable to periods prior to the completion of the sale in September 2016).
Those obligations continue until the expiration of the statute of limitations applicable to the pre-closing periods.
In August 2019, AlphaCredit notified us of a potential indemnity claim for certain pre-closing taxes, but the nature, extent and validity of such claim has yet to be determined.
−Removed: Litigation and regulatory proceedings could have a material adverse impact on our business.
−Removed: We are currently subject to various litigation and regulatory actions, and additional actions could arise in the future.
−Removed: Potential actions range from claims and assertions arising in the ordinary course of business (such as contract, customer or employment disputes) to more significant corporate-level matters or shareholder litigation.
−Removed: All of these matters are subject to inherent uncertainties, and unfavorable rulings could occur, which could include monetary damages, fines and penalties or other relief.
−Removed: Any unfavorable ruling or outcome could have a material adverse effect on our results of operations or could negatively affect our reputation.
−Removed: See Note 14 of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data” for a description of shareholder litigation that is in the final stages of resolution.
−Removed: Under our certificate of incorporation, we are generally obligated to indemnify our directors and officers for costs and liabilities they incur in their capacity as directors or officers of the Company.
−Removed: Consequently, if a proceeding names or involves any of our directors or officers, then (subject to certain exceptions) we are generally obligated to pay or reimburse the cost or liability such director or officer incurs as a result of such proceeding (including defense costs, judgments and amounts paid in settlement).
−Removed: We maintain management liability insurance that protects us from much of this potential indemnification exposure, as well as potential costs or liabilities that may be directly incurred by the Company in some cases.
−Removed: However, our insurance coverage is subject to deductibles and there may be elements of the costs or liabilities that are not covered under the insurance policies.
−Removed: In addition, to the extent that our ultimate liability in any such proceeding (or any combination of proceedings that are included in the same policy year) exceeds the management liability policy limits, our results of operations and financial condition could be adversely affected.
+Added: The last two payments from AlphaCredit totaling $8.0 million have been placed into escrow pending resolution of the potential indemnity claim.
One person beneficially owns all of our voting stock and generally controls the outcome of all matters requiring a vote of stockholders, which may influence the value of our publicly traded non-voting stock.
8 unchanged sentences
Cohen is entitled to vote on all matters requiring approval of the Board.
−Removed: Our Bylaws currently provide that the
−Removed: presence of all directors shall constitute a quorum for the transaction of business, and that any act of the Board of Directors requires a unanimous approval of all directors.
+Added: Our Bylaws currently provide that the presence of all directors shall constitute a quorum for the transaction of business, and that any act of the Board of Directors requires a unanimous approval of all directors.
Consequently, Mr.
1 unchanged sentence
Cohen has agreed that, as a member of the Board of Directors, he will not participate in any Board vote regarding his position as Executive Chairman.
−Removed: Our acquisitions, investments and other transactions could disrupt our ongoing business and harm our results of operations.
−Removed: In pursuing our business strategy, we routinely conduct discussions, evaluate opportunities and enter into agreements regarding possible acquisitions, investments and other transactions.
−Removed: These transactions may involve significant challenges and risks, including risks that we may not realize the expected return on an acquisition or investment, that we may not be able to retain key personnel of an acquired business, or that we may experience difficulty in integrating acquired businesses into our business systems and processes.
−Removed: If we do enter into agreements with respect to acquisitions, investments or other transactions, we may fail to complete them due to inability to obtain required regulatory or other approvals or other factors.
−Removed: Furthermore, acquisitions, investments and other transactions require substantial management resources and have the potential to divert our attention from our existing business, and there are inherent risks in integrating and operating any acquired business.
−Removed: These factors could harm our business and results of operations.
We have a significant firearms business in the U.S., which exposes us to increased risks of regulatory fines and penalties, lawsuits and related liabilities.
9 unchanged sentences
Further, we could be subject to liability to customers or other third parties as a result of such activities.
−Removed: While we maintain asset protection and monitoring programs to mitigate these risks, as well as insurance programs to protect against catastrophic loss or exposure, there can be no assurance that these crimes will not occur or that such losses will not have an adverse effect on our business or results of operations.
−Removed: We may be exposed to liabilities under applicable anti-bribery, anti-corruption, anti-money laundering and other general business laws and regulations, and any determination that we violated these laws or regulations could have a material adverse effect on our business.
−Removed: We are subject to various anti-bribery and anti-corruption laws that prohibit improper payments or offers of payments to foreign governments and their officials for the purpose of obtaining or retaining business, including the Foreign Corrupt Practices Act in the U.S.
−Removed: and the General Law of Administrative Responsibility in Mexico.
−Removed: We are also subject to various laws and regulations designed to prevent money laundering or the financial support of terrorism or other illegal activity, including the USA PATRIOT Act and the Bank Secrecy Act in the U.S.
−Removed: and The Federal Law for the Prevention and Identification of Transactions with Funds From Illegal Sources in Mexico.
−Removed: See “Part I, Item 1 — Business — Regulation.” Further, our business is expanding in countries and regions that are less developed and are generally recognized as potentially more corrupt business and political environments.
−Removed: While we maintain controls and policies to ensure compliance with applicable laws and regulations, these controls and policies may prove to be less than effective.
−Removed: If team members, agents or other persons for whose conduct we are held responsible violate our policies, we may be subject to severe criminal or civil sanctions and penalties, and we may be subject to other liabilities that could have a material adverse effect on our business, results of operations and financial condition.
−Removed: Changes in our liquidity and capital requirements or in access to capital markets or other financing and transactional banking sources could limit our ability to achieve our plans.
−Removed: A significant reduction in cash flows from operations or the availability of debt or equity financing could materially and adversely affect our ability to achieve our planned growth and operating results.
−Removed: Our ability to obtain debt or equity financing,
−Removed: including the possible refinancing of existing indebtedness, will depend upon market conditions, our financial condition and the willingness of financing sources to make capital available to us at acceptable rates and terms.
−Removed: The inability to access capital at acceptable rates and terms could restrict or limit our ability to achieve our growth objectives, which could adversely affect our financial condition and results of operations.
−Removed: Our access to transactional banking services, as well as international wire services between certain countries, is an ongoing business requirement.
−Removed: Inability in accessing or maintaining transactional banking or wire services could lead to increased costs or the inability to efficiently manage our cash as we would be required to seek alternative banking services or obtain services from several regional or local retail banks.
+Added: While we maintain asset protection and monitoring programs to mitigate these risks, as well as insurance programs to
+Added: protect against catastrophic loss or exposure, there can be no assurance that these crimes will not occur or that such losses will not have an adverse effect on our business or results of operations.
Changes in competition from various sources could have a material adverse impact on our ability to achieve our plans.
8 unchanged sentences
As our technology infrastructure continues to evolve from on premise to cloud service providers, we continue to assess the security of such infrastructure, including third party service providers.
−Removed: We collect and store a variety of sensitive customer information, and breaches in data security or other cyber-attacks could harm our business operations and lead to reputational damage.
−Removed: In the course of conducting our business, we collect and store on our information technology systems a variety of information about our customers, including sensitive personal identifying and financial information.
−Removed: We may not have the resources or technical expertise to anticipate or prevent rapidly evolving types of cyber-attacks.
−Removed: Attacks may be targeted at us, our service providers, our customers or others who have entrusted us with information.
−Removed: Actual or anticipated attacks may cause us to incur increased costs, including costs to hire additional personnel, purchase additional protection technologies, train team members and engage third-party experts and consultants.
−Removed: Advances in computer capabilities, new technological discoveries or other developments may result in the technology we use to protect data being breached or compromised.
−Removed: In addition, data and security breaches can occur as a result of non-technical issues, including breach by us or by persons with whom we have commercial relationships that result in the unauthorized release of personal or confidential information.
−Removed: We could be subject to fines, penalties and liabilities if any such information is misappropriated from our systems or we otherwise fail to maintain the security and confidentiality of such information.
−Removed: Further, any such data security breach could cause damage to our reputation and a loss of confidence in our data security measures, which could adversely affect our business and prospects.
We invested in Cash Converters International Limited for strategic reasons.
We may be required in future periods to impair our investment and recognize related investment losses, as we have done in the past, and we may not realize a positive return on the investment.
−Removed: We currently have a significant investment in Cash Converters International, which is a publicly traded company based in Australia.
−Removed: We made the initial investment in November 2009 and have made incremental investments periodically since then, including a $14.0 million investment in June 2018 to increase our ownership percentage to 34.75%.
+Added: We currently own 34.75% of the outstanding ordinary shares of Cash Converters International, which is a publicly traded company based in Australia.
+Added: We made the initial investment in November 2009 and have made incremental investments periodically since then.
The success of this strategic investment is dependent on a variety of factors, including Cash Converters International’s business performance and the market’s assessment of that performance.
−Removed: Cash Converters International’s business has been under significant pressure for the past several years, principally as a result of regulatory changes in Australia and the United Kingdom and related class action litigation.
−Removed: After an analysis of Cash Converters International’s stock price performance and other factors, we determined that the fair value of our investment in Cash Converters International at September 30, 2019 was less than its carrying value but that the impairment was not “other than temporary” primarily due to Cash Converters’ October 2019 agreement to settle a class
−Removed: action lawsuit and the resulting rebound in Cash Converters’ stock price above its recorded value.
+Added: We have recorded a number of impairments to the carrying value of our investment in Cash Converters International in the past.
+Added: After an analysis of Cash Converters International’s stock price performance and other factors, we determined that the fair value of our investment in Cash Converters International at September 30, 2020 was greater than its carrying value.
Accordingly, we did not record an impairment at that date.
17 unchanged sentences
As a result, geographically isolated natural disasters could have a material adverse effect on our overall operations and financial performance.
−Removed: We may face business interruptions or other adverse effects on our operations and growth.
−Removed: Our business and operations could be subject to interruption or damage due to inclement weather, natural disaster, power loss, acts of violence, terrorist attacks, war, civil unrest or similar events.
−Removed: Further, we may experience information technology or other business systems disruptions.
−Removed: Such events could impair our customers' access to our business, impact our ability to expand or continue our operations or otherwise have an adverse effect on our financial condition.
−Removed: We could be subject to changes in tax rates, the adoption of new tax laws in the U.S.
−Removed: or other countries, or exposure to additional tax liabilities.
−Removed: We are subject to taxes in the U.S.
−Removed: and several foreign jurisdictions.
−Removed: Current economic and political conditions make tax rates in any of these jurisdictions subject to significant change.
−Removed: Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax rates or changes in tax laws or their interpretation.
Goodwill comprises a significant portion of our total assets.
2 unchanged sentences
In accordance with Financial Accounting Standards Board Accounting Standards Codification 350-20-35 , we test goodwill and intangible assets with an indefinite useful life for potential impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.
−Removed: These events or circumstances could include a significant change in the business climate, a change in strategic direction, legal factors, operating performance indicators, a change in the competitive environment, the sale or disposition of a significant portion of a
−Removed: reporting unit, or future economic factors such as unfavorable changes in the estimated future discounted cash flows of our reporting units.
+Added: These events or circumstances could include a significant change in the business climate, a change in strategic direction, legal factors, operating performance indicators, a change in the competitive environment, the sale or disposition of a significant portion of a reporting unit, or future economic factors such as unfavorable changes in the estimated future discounted cash flows of our reporting units.
Our annual goodwill impairment test is performed in the fourth quarter utilizing the income approach.
1 unchanged sentence
The income approach includes assumptions about revenue growth rates, operating margins and terminal growth rates discounted by an estimated weighted-average cost of capital derived from other publicly traded companies that are similar but not identical from an operational and economic standpoint.
+Added: During the second quarter of fiscal 2020, there was an indicator of impairment due to a decline in our market capitalization.
+Added: We performed a quantitative analysis as of March 31, 2020 utilizing the income approach.
+Added: As a result of our quantitative analysis, we determined the fair value of each of our reporting units was below its carrying value because of the impact of COVID-19, including a significant decline in pawn loan balances due to changes in typical customer behavior and mandated store closures in our GPMX countries.
+Added: These factors impacted the forecast of future net revenues and earnings and resulted in lower present value of future cash flows.
+Added: This led to a goodwill impairment charge of $41.3 million in the second quarter of fiscal 2020.
+Added: These impairments were recorded under "Impairment of goodwill, intangible and other assets" in the Consolidated Statements of Operations
See Note 1 and Note 8 of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data” for a discussion of our annual impairment tests performed for goodwill and indefinite-lived intangible assets during fiscal 2020.
−Removed: Changes in the economic conditions or regulatory environment could negatively affect our key assumptions.
−Removed: Future negative developments including a decline in merchandise sales or demand for our products, a decline in precious metal commodity values, or inflation in costs relative to revenues in our Latin American operations in Guatemala, Honduras, El Salvador or Peru could lead to potential impairment of the $34.5 million in goodwill recorded in our “GPMX” reporting unit within our Latin America reporting segment.
−Removed: There were no impairments of goodwill during fiscal 2019 , but there may be impairments in the future should events or circumstances as noted above change.
−Removed: We also perform periodic reviews for potential impairment of other intangible assets.
−Removed: At September 30, 2019, we determined an impairment had occurred in the fair value of an acquired trade name of a previously acquired entity and recorded a related impairment of $0.6 million.
−Removed: If future and expected performance of acquired entities drops below current expectations, we may recognize further impairments of recorded trade names in future periods, which could negatively affect our results of operations and financial condition.
−Removed: At September 30, 2019, the net book value of recorded trade names, most of which were acquired after fiscal 2017, was $19.9 million .
+Added: We remain confident in our businesses, as all business units were performing well prior to the impact of COVID-19.
The conversion feature of our convertible notes, if triggered, may adversely affect our financial condition and operating results.
6 unchanged sentences
Any sales in the public market of such shares could adversely affect prevailing market prices of our Class A Common Stock.
−Removed: In addition, the existence of the convertible notes may encourage short selling by market participants because the conversion of such notes could be used to satisfy short positions, or anticipated conversion of the notes into shares of our Class A Common Stock could depress the price of our Class A Common Stock.
+Added: In addition, the existence of the convertible notes may encourage short selling by market participants because the conversion of such notes could be used to satisfy short positions, or
+Added: anticipated conversion of the notes into shares of our Class A Common Stock could depress the price of our Class A Common Stock.
We have a limited number of unreserved shares available for future issuance, which may limit our ability to conduct future financings and other transactions and our ability to offer equity awards to management.
Our certificate of incorporation currently authorizes us to issue up to 100 million shares of Class A Common Stock.
−Removed: Taking into consideration the shares that are issued and outstanding, as well as the shares that have been reserved for issuance pursuant to convertible notes, warrants and outstanding equity incentive compensation awards and the conversion of the Class B Common Stock, we had approximately 1,000,000 shares of authorized Class A Common Stock available for other uses as of September 30, 2019 .
+Added: Taking into consideration the shares that are issued and outstanding, as well as the shares that have been reserved for issuance pursuant to convertible notes, warrants and outstanding equity incentive compensation awards and the conversion of the Class B Common Stock, we had approximately 10.4 million shares of authorized Class A Common Stock available for other uses as of September 30, 2020.
Therefore, our ability to issue shares of Class A Common Stock (other than pursuant to the existing reserved-for commitments), or securities or instruments that are convertible into or exchangeable for shares of Class A Common Stock, may be limited until such time that additional authorized, unissued and unreserved shares become available or unless we determine that we are unlikely to issue all of the shares that are currently reserved.
1 unchanged sentence
Further, our ability to offer equity-based compensation to our management team may also be limited, which could adversely affect our ability to align management’s incentives with stockholders or attract and retain key management personnel.
+Added: General Risks
+Added: Public health issues could adversely affect our financial condition, results of operations or liquidity.
+Added: Our business may be impacted by public health issues, including other pandemics and the spread of contagious diseases.
+Added: Such public health issues, and the government and consumer responses thereto, may (i) limit our ability to supply products and services to our customers as a result of store closures, reduced access to or foot traffic in our stores, or labor shortages, (ii) adversely affect the demand for our products and services or (iii) cause other unforeseen negative developments.
+Added: Any of these factors may adversely affect our financial condition, results of operations or liquidity.
+Added: We have significant operations in Latin America, and changes in the business, regulatory, political or social climate could impact our operations there, which could adversely affect our results of operations and growth plans.
+Added: We own and operate a significant number of pawn stores in Latin America (primarily Mexico, but also Guatemala, El Salvador, Honduras and Peru).
+Added: Further, our growth plans include potential expansion in some of those countries as well as potentially other countries in Latin America.
+Added: Doing business in those countries exposes us to risks related to political instability, corruption, economic volatility, drug cartel and gang-related violence, social unrest including riots and looting, tax and foreign investment policies, public safety and security concerns, and uncertain application of laws and regulations.
+Added: Consequently, actions or events in any of those countries that are beyond our control could restrict our ability to operate there or otherwise adversely affect the profitability of those operations.
+Added: Furthermore, changes in the business, regulatory or political climate in any of those countries, or significant fluctuations in currency exchange rates, could affect our ability to expand or continue our operations there, which could have a material adverse impact on our prospects, results of operations and cash flows.
+Added: For a description of the current regulatory environment in the Latin American countries in which we operate, see “Mexico Regulations” and “Other Latin America Regulations” under “Part I, Item 1 — Business — Regulation.”
+Added: A significant change in foreign currency exchange rates could have a material adverse impact on our earnings and financial position.
+Added: We have foreign operations in Latin America (Mexico, Guatemala, Honduras, El Salvador and Peru) and an equity investment in Australia.
+Added: Our assets and investments in, and earnings and dividends from each of these countries must be translated to U.S.
+Added: dollars from their respective functional currencies.
+Added: A significant weakening of any of these foreign currencies could result in lower assets and earnings in U.S.
+Added: dollars, resulting in a potentially material adverse impact on our financial position, results of operations and cash flows.
+Added: Litigation and regulatory proceedings could have a material adverse impact on our business.
+Added: We are currently subject to various litigation and regulatory actions, and additional actions could arise in the future.
+Added: Potential actions range from claims and assertions arising in the ordinary course of business (such as contract, customer or employment disputes) to more significant corporate-level matters or shareholder litigation.
+Added: All of these matters are subject to inherent uncertainties, and unfavorable rulings could occur, which could include monetary damages, fines and penalties or other relief.
+Added: Any unfavorable ruling or outcome could have a material adverse effect on our results of operations or could negatively affect our reputation.
+Added: Under our certificate of incorporation, we are generally obligated to indemnify our directors and officers for costs and liabilities they incur in their capacity as directors or officers of the Company.
+Added: Consequently, if a proceeding names or involves any of our directors or officers, then (subject to certain exceptions) we are generally obligated to pay or reimburse the cost or liability such director or officer incurs as a result of such proceeding (including defense costs, judgments and amounts paid in settlement).
+Added: We maintain management liability insurance that protects us from much of this potential indemnification exposure, as well as potential costs or liabilities that may be directly incurred by the Company in some cases.
+Added: However, our insurance coverage is subject to deductibles and there may be elements of the costs or liabilities that are not covered under the insurance policies.
+Added: In addition, to the extent that our ultimate liability in any such proceeding (or any combination of proceedings that are included in the same policy year) exceeds the management liability policy limits, our results of operations and financial condition could be adversely affected.
+Added: Our acquisitions, investments and other transactions could disrupt our ongoing business and harm our results of operations.
+Added: In pursuing our business strategy, we routinely conduct discussions, evaluate opportunities and enter into agreements regarding possible acquisitions, investments and other transactions.
+Added: These transactions may involve significant challenges and risks, including risks that we may not realize the expected return on an acquisition or investment, that we may not be able to retain key personnel of an acquired business, or that we may experience difficulty in integrating acquired businesses into our business systems and processes.
+Added: If we do enter into agreements with respect to acquisitions, investments or other transactions, we may fail to complete them due to inability to obtain required regulatory or other approvals or other factors.
+Added: Furthermore, acquisitions, investments and other transactions require substantial management resources and have the potential to divert our attention from our existing business, and there are inherent risks in integrating and operating any acquired business.
+Added: These factors could harm our business and results of operations.
+Added: We may be exposed to liabilities under applicable anti-bribery, anti-corruption, anti-money laundering and other general business laws and regulations, and any determination that we violated these laws or regulations could have a material adverse effect on our business.
+Added: We are subject to various anti-bribery and anti-corruption laws that prohibit improper payments or offers of payments to foreign governments and their officials for the purpose of obtaining or retaining business, including the Foreign Corrupt Practices Act in the U.S.
+Added: and the General Law of Administrative Responsibility in Mexico.
+Added: We are also subject to various laws and regulations designed to prevent money laundering or the financial support of terrorism or other illegal activity, including the USA PATRIOT Act and the Bank Secrecy Act in the U.S.
+Added: and The Federal Law for the Prevention and Identification of Transactions with Funds From Illegal Sources in Mexico.
+Added: See “Part I, Item 1 — Business — Regulation.” Further, our business is expanding in countries and regions that are less developed and are generally recognized as potentially more corrupt business and political environments.
+Added: While we maintain controls and policies to ensure compliance with applicable laws and regulations, these controls and policies may prove to be less than effective.
+Added: If team members, agents or other persons for whose conduct we are held responsible violate our policies, we may be subject to severe criminal or civil sanctions and penalties, and we may be subject to other liabilities that could have a material adverse effect on our business, results of operations and financial condition.
+Added: Changes in our liquidity and capital requirements or in access to capital markets or other financing and transactional banking sources could limit our ability to achieve our plans.
+Added: A significant reduction in cash flows from operations or the availability of debt or equity financing could materially and adversely affect our ability to achieve our planned growth and operating results.
+Added: Our ability to obtain debt or equity financing, including the possible refinancing of existing indebtedness, will depend upon market conditions, our financial condition and the willingness of financing sources to make capital available to us at acceptable rates and terms.
+Added: The inability to access capital at acceptable rates and terms could restrict or limit our ability to achieve our growth objectives, which could adversely affect our financial condition and results of operations.
+Added: Our access to transactional banking services, as well as international wire services between certain countries, is an ongoing business requirement.
+Added: Inability in accessing or maintaining transactional banking or wire services could lead to increased costs or the inability to efficiently manage our cash as we would be required to seek alternative banking services or obtain services from several regional or local retail banks.
+Added: We collect and store a variety of sensitive customer information, and breaches in data security or other cyber-attacks could harm our business operations and lead to reputational damage.
+Added: In the course of conducting our business, we collect and store on our information technology systems a variety of information about our customers, including sensitive personal identifying and financial information.
+Added: We may not have the resources or technical expertise to anticipate or prevent rapidly evolving types of cyber-attacks.
+Added: Attacks may be targeted at us, our service providers, our customers or others who have entrusted us with information.
+Added: Actual or anticipated attacks may cause us to incur increased costs, including costs to hire additional personnel, purchase additional protection technologies, train team members and engage third-party experts and consultants.
+Added: Advances in computer capabilities, new technological discoveries or other developments may result in the technology we use to protect data being breached or compromised.
+Added: In addition, data and security breaches can occur as a result of non-technical issues, including breach by us or by persons with whom we have commercial relationships that result in the unauthorized release of personal or confidential information.
+Added: We could be subject to fines, penalties and liabilities if any such information is misappropriated from our systems or we otherwise fail to maintain the security and confidentiality of such information.
+Added: Further, any such data security breach could cause damage to our reputation and a loss of confidence in our data security measures, which could adversely affect our business and prospects.
+Added: We may face business interruptions or other adverse effects on our operations and growth.
+Added: Our business and operations could be subject to interruption or damage due to inclement weather, natural disaster, power loss, acts of violence, terrorist attacks, war, civil unrest or similar events.
+Added: Further, we may experience information technology or other business systems disruptions.
+Added: Such events could impair our customers' access to our business, impact our ability to expand or continue our operations or otherwise have an adverse effect on our financial condition.
We face other risks discussed under "Part II, Item 7A — Quantitative and Qualitative Disclosures about Market Risk."
1 unchanged sentence
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.