What changed in this filing

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Item 1. Financial Statements

2021-08-04 compared with 2021-05-05 · 142 added, 67 removed, 558 unchanged (27% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts) March 31,

(in thousands, except share and per share amounts) June 30,

September 30,

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issued and outstanding:

52,873,568 as of March 31, 2021;

52,097,590 as of March 31, 2020;

53,086,438 as of June 30, 2021;

52,097,590 as of June 30, 2020;

and 52,332,848 as of September 30, 2020

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands, except per share amount) 2021 2020 2021 2020

14 unchanged sentences

Loss on sale or disposal of assets and other — 255 90 1,260

Other charges 497 — 497 —

Total operating expenses 104,308 106,451 306,798 381,113

4 unchanged sentences

Other expense (income) 65 28 ( 389 ) ( 215 )

Income (loss) before income taxes 6,799 ( 34,125 ) 12,301 ( 31,128 )

Income tax expense 1,469 6,749 2,672 8,508

Net income (loss) $ 5,330 $ ( 40,874 ) $ 9,629 $ ( 39,636 )

Basic earnings (loss) per share $ 0.10 $ ( 0.74 ) $ 0.17 $ ( 0.71 )

Diluted earnings (loss) per share $ 0.10 $ ( 0.74 ) $ 0.17 $ ( 0.71 )

(Loss) income before income taxes ( 766 ) ( 10,238 ) 11,535 ( 41,366 )

Income tax expense (benefit) 1,804 ( 4,751 ) 4,476 3,757

Net (loss) income $ ( 2,570 ) $ ( 5,487 ) $ 7,059 $ ( 45,123 )

Basic (loss) earnings per share $ ( 0.05 ) $ ( 0.10 ) $ 0.13 $ ( 0.81 )

Diluted (loss) earnings per share $ ( 0.05 ) $ ( 0.10 ) $ 0.13 $ ( 0.81 )

Weighted-average basic shares outstanding 55,898 55,068 55,639 55,395

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands) 2021 2020 2021 2020

Net income (loss) $ 5,330 $ ( 40,874 ) $ 9,629 $ ( 39,636 )

Other comprehensive (loss) income:

Net (loss) income $ ( 2,570 ) $ ( 5,487 ) $ 7,059 $ ( 45,123 )

Other comprehensive income (loss):

Foreign currency translation adjustment, net of tax 3,459 5,416 12,976 ( 18,359 )

22 unchanged sentences

Balances as of March 31, 2021 55,844 $ 558 $ 399,439 $ 327,798 $ ( 58,551 ) $ 669,244

Stock compensation — — 1,538 — — 1,538

Transfer of consideration for current period acquisition 213 2 1,545 — — 1,547

Foreign currency translation gain — — — — 3,459 3,459

Net loss — — — ( 2,570 ) — ( 2,570 )

Balances as of June 30, 2021 56,057 $ 560 $ 402,522 $ 325,228 $ ( 55,092 ) $ 673,218

Common Stock Additional

18 unchanged sentences

Balances as of March 31, 2020 55,068 $ 551 $ 406,171 $ 347,004 $ ( 76,173 ) $ 677,553

Stock compensation — — 2,430 — — 2,430

Foreign currency translation gain — — — — 5,416 5,416

Net loss — — — ( 5,487 ) — ( 5,487 )

Balances as of June 30, 2020 55,068 $ 551 $ 408,601 $ 341,517 $ ( 70,757 ) $ 679,912

See accompanying notes to unaudited interim condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

(in thousands) 2021 2020

12 unchanged sentences

Equity in net (income) loss of unconsolidated affiliates ( 2,409 ) 5,896

Changes in operating assets and liabilities:

Changes in operating assets and liabilities, net of business acquisitions:

Service charges and fees receivable ( 2,832 ) 14,076

10 unchanged sentences

Capital expenditures, net ( 14,635 ) ( 20,867 )

Acquisitions, net of cash acquired ( 15,132 ) —

Principal collections on notes receivable — 4,000

Net cash provided by investing activities 9,080 28,636

Net cash (used in) provided by investing activities ( 37,086 ) 110,389

Financing activities:

2 unchanged sentences

Proceeds from borrowings, net of issuance costs — ( 106 )

Payments on borrowings ( 871 ) ( 355 )

Payments on assumed debt and other borrowings ( 15,363 ) ( 316 )

Repurchase of common stock — ( 5,158 )

1 unchanged sentence

Effect of exchange rate changes on cash and cash equivalents and restricted cash 5,076 ( 6,678 )

Net increase in cash, cash equivalents and restricted cash 31,091 35,287

Net (decrease) increase in cash, cash equivalents and restricted cash ( 15,090 ) 152,688

Cash, cash equivalents and restricted cash at beginning of period 312,553 162,442

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Pawn loans forfeited and transferred to inventory $ 145,839 $ 200,160

Transfer of consideration for current period acquisition 1,547 —

Acquisition earn-out contingency 4,608 —

Accrued acquisition consideration held as restricted cash 5,824 —

See accompanying notes to unaudited interim condensed consolidated financial statements.

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Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

These Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2020 , filed with the SEC on December 14, 2020 (“2020 Annual Report”).

These Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended September 30, 2020 , filed with the SEC on December 14, 2020 (“2020 Annual Report”).

In the opinion of management, the accompanying Condensed Consolidated Financial Statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation.

Financial results for the three and six-month periods ended March 31, 2021, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2021.

Our business is subject to seasonal variations, and operating results for the three and six months ended March 31, 2021 and 2020 (the "current quarter" and "prior-year quarter," respectively) are not necessarily indicative of the results of operations for the full fiscal year.

Financial results for the three and nine-month periods ended June 30, 2021, are not necessarily indicative of results that may be expected for the fiscal year ending September 30, 2021.

Our business is subject to seasonal variations, and operating results for the three and nine months ended June 30, 2021 and 2020 (the "current quarter" and "prior-year quarter," respectively) are not necessarily indicative of the results of operations for the full fiscal year.

There have been no changes that have had a material impact in significant accounting policies as described in our Annual Report on Form 10-K for the year ended September 30, 2020 .

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GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Such estimates and assumptions include the determination of revenue recognition, inventory reserves, expected credit losses, useful lives of long-lived and intangible assets, valuation of share-based compensation, valuation of equity investments, valuation of deferred tax assets and liabilities, loss contingencies related to litigation and discount rates used for operating leases.

Such estimates and assumptions include the determination of inventory reserves, expected credit losses, useful lives of long-lived and intangible assets, valuation of share-based compensation, valuation of equity investments, valuation of deferred tax assets and liabilities, loss contingencies related to litigation and discount rates used for operating leases.

Actual results may result in actual amounts differing from reported amounts.

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We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

On June 9, 2021, we completed the acquisition of 100 % of the common shares of PLO del Bajio S.

(“Bajio”) and gained control of the entity, further expanding our geographic footprint within Mexico with the addition of 128 pawn stores.

These stores, operating under the name "Cash Apoyo Efectivo," are located principally in the Mexico City metropolitan area and have strong brand recognition in that market.

This is our largest acquisition to date in terms of store-count.

We now operate a total of 1,143 pawn stores, 627 of which are in Latin America, including 503 in Mexico.

The total consideration paid for Bajio was $ 23.6 million, consisting of cash of $ 17.4 million, of which $ 11.6 million was paid in cash at closing and the remaining $ 5.8 million is accrued and held as restricted cash to be paid out per the acquisition agreement and 212,870 shares of our Class A Non-Voting Common Stock valued at $ 1.6 million.

In addition, t he sellers may be entitled to additional payments of up to $ 4.6 million over the next two years , contingent on the performance of the acquired stores with growing its loan portfolio.

We recorded this earn-out contingency as part of the total consideration as the metrics are considered achievable by Management.

We also repaid $ 14.9 million of Bajio’s existing debt assumed in the acquisition on June 9, 2021.

The assets acquired and liabilities assumed are based upon the estimated fair values at the date of acquisition.

The excess purchase price over the estimated fair market value of the new assets acquired has been recorded as goodwill.

The estimated fair value of the assets acquired and liabilities assumed are provisional as management is still gathering additional information to complete the purchase accounting.

The preliminary allocation of the consideration for the net acquired assets from this business combination were as follows, in thousands:

Cash and cash equivalents $ 308

Earning assets 9,462

Lease right-of-use assets 10,826

Property and equipment 4,317

Intangible assets* 3,965

Goodwill 22,957

Other assets 649

Accounts payable, deferred taxes and other liabilities ( 3,150 )

Lease liability ( 10,826 )

Assumed debt ( 14,931 )

Total consideration $ 23,577

*Intangible assets consist of $ 4.0 million in trade names.

The factors contributing to the recognition of goodwill, which is recorded in our Latin America Pawn segment, were based on several strategic and synergistic benefits we expect to realize from the acquisition, including expansion of our store base as well as the ability to further leverage our pawn expertise, investments in information technology and other back office and support functions of our existing Mexico pawn business.

We expect none of the goodwill resulting from this business combination will be deductible for income tax purposes.

The results of Bajio have been included in our condensed consolidated financial statements from June 9, 2021 through June 30, 2021, and are reported in our Latin America Pawn segment.

The acquired business contributed revenues of $ 1.7 million and net income of $ 0.1 million to us for the period from June 9, 2021 to June 30, 2021.

The following unaudited pro forma summary presents consolidated information for us as if the business combination had occurred on October 1, 2019.

The pro forma information is not necessarily indicative of our results of operations had the acquisitions been completed on the above date, nor is it necessarily indicative of our future results.

The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions, nor does it reflect additional revenue opportunities following the acquisition.

The pro forma adjustments reflected in the table below are subject to change as additional analysis is performed.

Three Months Ended

Nine Months Ended

(in thousands, except per share amounts) 2021 2020 2021 2020

Revenue $ 180,854 $ 216,083 $ 558,426 $ 681,069

Net (loss) income ( 2,475 ) ( 5,354 ) 6,775 ( 42,628 )

Basic (loss) earnings per common share ( 0.04 ) ( 0.10 ) 0.12 ( 0.75 )

Diluted (loss) earnings per common share ( 0.04 ) ( 0.10 ) 0.12 ( 0.75 )

We did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma net revenue and net income.

These pro forma amounts have been calculated after applying the Company's accounting policies and adjusting the results to reflect the additional amortization that would have been incurred assuming the amortization of the trade name had been applied from October 1, 2019.

During the three and nine months ended June 30, 2021, we incurred total acquisition costs of $ 0.2 million and $ 0.4 million, respectively.

The acquisition costs were primarily related to legal, accounting and consulting services, were expensed as incurred through June 30, 2021 and are included in general and administrative expenses in the consolidated statements of operations.

In May 2021, we acquired substantially all of the assets associated with 11 pawn stores in the Houston, Texas area, providing an immediate market-leading position in the South Houston area and enhancing our already strong position in the strategically important Houston metro market.

We have concluded that this acquisition was immaterial to our overall consolidated financial results and, therefore, have omitted information that would otherwise be required.

EXPECTED CREDIT LOSSES

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We then apply a reserve to pawn service charges receivable at the end of each month using a pawn loan forfeiture rate derived from a trailing twelve-month average, adjusted for seasonality factors.

We have evaluated, on a collective basis, our pawn loan receivables and pawn service charge receivables and determined the new credit loss standard did not have a material impact on our consolidated financial statements, as our current polices appropriately capture lifetime expected credit losses.

We have evaluated, on a collective basis, our pawn loan receivables and pawn service charges receivables and determined the new credit loss standard did not have a material impact on our consolidated financial statements, as our current polices appropriately capture lifetime expected credit losses.

The presentation of pawn loan and pawn service charge receivable as separate line items on our consolidated balance sheet will remain unchanged under the new credit loss standard.

As of March 31, 2021, pawn loan and related pawn service charge receivable, net were $ 125.3 million and $ 20.8 million, respectively.

As of June 30, 2021, pawn loan and related pawn service charges receivable, net were $ 157.2 million and $ 25.0 million, respectively.

The following table summarizes the changes in the carrying amount of goodwill by segment and in total:

Nine Months Ended June 30, 2021

(in thousands) U.S.

Pawn Latin America Pawn Consolidated

Balances as of September 30, 2020 $ 241,928 $ 15,654 $ 257,582

Acquisitions 2,394 22,957 25,351

Effect of foreign currency translation changes — 686 686

Balances as of June 30, 2021 $ 244,322 $ 39,297 $ 283,619

Nine Months Ended June 30, 2020

(in thousands) U.S.

Pawn Latin America Pawn Consolidated

Balances as of September 30, 2019 $ 251,752 $ 48,775 $ 300,527

Effect of foreign currency translation changes — ( 1,888 ) ( 1,888 )

Measurement period adjustments 176 ( 149 ) 27

Impairment charge ( 10,000 ) ( 31,340 ) ( 41,340 )

Balances as of June 30, 2020 $ 241,928 $ 15,398 $ 257,326

OTHER CHARGES

During the fourth quarter of fiscal 2020, we began to implement strategic initiatives to refocus on our core pawn business and optimize our cost structure in order to improve our bottom line performance and position the Company for sustainable growth.

The initiatives focused on workforce reductions, closure of our CASHMAX operations, store closures, write-offs and other miscellaneous charges.

We recorded $ 20.4 million of such charges for the quarter ended September 30, 2020, and had accrued charges of $ 10.7 million remaining at September 30, 2020.

We had no similar charges for the six months ended March 31, 2021.

(in thousands) Accrued Charges at September 30, 2020 Charges Payments and Adjustments Accrued Charges at December 31, 2020 Charges Payments and Adjustments Accrued Charges at March 31, 2021

We recorded $ 0.5 million of charges for the three months ended June 30, 2021 related to the closure of store operations in Peru.

(in thousands) Accrued Charges at September 30, 2020 Charges Payments and Adjustments Accrued Charges at March 31, 2021 Charges Payments and Adjustments Accrued Charges at June 30, 2021

Cash charges:

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Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands, except per share amounts) 2021 2020 2021 2020

Net income (loss) $ 5,330 $ ( 40,874 ) $ 9,629 $ ( 39,636 )

Net (loss) income $ ( 2,570 ) $ ( 5,487 ) $ 7,059 $ ( 45,123 )

Earnings per common share

Average common share outstanding (denominator) 55,898 55,068 55,639 55,395

Earnings per common share $ 0.10 $ ( 0.74 ) $ 0.17 $ ( 0.71 )

(Loss) earnings per common share $ ( 0.05 ) $ ( 0.10 ) $ 0.13 $ ( 0.81 )

Diluted earnings per common share

2 unchanged sentences

Diluted average common shares outstanding (denominator) 55,898 55,068 55,653 55,395

Diluted earnings per common share $ 0.10 $ ( 0.74 ) $ 0.17 $ ( 0.71 )

Diluted (loss) earnings per common share $ ( 0.05 ) $ ( 0.10 ) $ 0.13 $ ( 0.81 )

Potential common shares excluded from the calculation of diluted earnings per share above:

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See Note 10 for discussion of the terms and conditions of the potential impact of the 2024 Convertible Notes and 2025 Convertible Notes.

This amount excludes all potential common shares for periods when there is a loss from continuing operations.

** Includes antidilutive share-based awards as well as performance-based share-based awards that are contingently issuable, but for which the condition for issuance has not been met as of the end of the reporting period.

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The table below presents balances of our operating leases:

(in thousands) March 31, 2021 March 31, 2020 September 30,

(in thousands) June 30, 2021 June 30, 2020 September 30,

Right-of-use asset $ 185,467 $ 204,591 $ 183,809

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands) 2021 2020 2021 2020

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Other supplemental information includes the following for our operating leases:

Six Months Ended

Nine Months Ended

Weighted-average remaining contractual lease term (years)

Weighted-average incremental borrowing rate 7.86 % 8.25 %

Maturities of lease liabilities as of March 31, 2021 were as follows (in thousands):

Maturities of lease liabilities as of June 30, 2021 were as follows (in thousands):

Remaining 2021

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Non-current portion $ 149,342

We recorded $ 6.6 million and $ 0.9 million in non-cash additions to our right of use assets and lease liabilities for the six months ended March 31, 2021 and March 31, 2020, respectively.

We recorded $ 33.5 million and $ 10.1 million in non-cash additions to our right of use assets and lease liabilities for the nine months ended June 30, 2021 and June 30, 2020, respectively.

STRATEGIC INVESTMENTS

As of March 31, 2021, we owned 214,183,714 shares, or 34.75 %, of Cash Converters International Limited ("Cash Converters International").

On April 14, 2021, we received an additional 9,519,277 shares in Cash Converters International Limited ("Cash Converters International") resulting from the reinvestment of a dividend, bringing our total ownership to 223,702,991 shares, or 35.65 % of Cash Converters International as of June 30, 2021.

The following tables present summary financial information for Cash Converters International’s most recently reported results at December 31, 2020 after translation to U.S.

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Fair Value Measurement on a Recurring Basis

As of March 31, 2021 and September 30, 2020, we did not have any financial assets or liabilities measured at fair value on a recurring basis.

As of June 30, 2021, June 30, 2020 and September 30, 2020, we did not have any financial assets or liabilities measured at fair value on a recurring basis.

Financial Assets and Liabilities Not Measured at Fair Value

The tables below present our estimates of fair value of financial assets and liabilities that were not measured at fair value:

The tables below present our estimates of fair value of financial assets and liabilities that were not measured at fair value on a recurring basis:

Carrying Value Estimated Fair Value

March 31, 2021 March 31, 2021 Fair Value Measurement Using

June 30, 2021 June 30, 2021 Fair Value Measurement Using

(in thousands) Level 1 Level 2 Level 3

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Carrying Value Estimated Fair Value

March 31, 2020 March 31, 2020 Fair Value Measurement Using

June 30, 2020 June 30, 2020 Fair Value Measurement Using

(in thousands) Level 1 Level 2 Level 3

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All principal and accrued interest is due and payable in April 2024.

The note approximated its carrying value as of March 31, 2021.

The note approximated its carrying value as of June 30, 2021.

We use the equity method of accounting to account for our 35.65 % ownership in Cash Converters International.

The inputs used to generate the fair value of the investment were considered Level 1 inputs.

These inputs are comprised of (a) the quoted stock price on the Australian Stock Exchange multiplied by (b) the number of shares we owned multiplied by (c) the applicable foreign currency exchange rate as of the end of our reporting period.

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As the quoted price inputs are highly variable from day to day, the fair value estimates disclosed above could significantly increase or decrease.

In September 2020, we received the final payment from AlphaCredit on the notes receivable related to the sale of Grupo Finmart and recorded the amount under “Restricted cash” in our consolidated balance sheet as of March 31, 2021.

In August 2019, AlphaCredit notified us of an indemnity claim for certain pre-closing taxes, but the nature, extent and validity of such claim has yet to be determined.

The following table presents the Company's debt instruments outstanding:

March 31, 2021 March 31, 2020 September 30, 2020

June 30, 2021 June 30, 2020 September 30, 2020

(in thousands) Gross Amount Debt Discount and Issuance Costs Carrying Amount Gross Amount Debt Discount and Issuance Costs Carrying Amount Gross Amount Debt Discount and Issuance Costs Carrying Amount

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Certain disclosures omitted due to materiality considerations.

The following table presents the Company's contractual maturities related to the debt instruments as of March 31, 2021:

The following table presents the Company's contractual maturities related to the debt instruments as of June 30, 2021:

Schedule of Contractual Maturities

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* Excludes the potential impact of embedded derivatives as discussed below.

The following table presents the Company's interest expense related to the Convertible Notes for the three and six months ended March 31, 2021 and 2020:

The following table presents the Company's interest expense related to the Convertible Notes for the three and nine months ended June 30, 2021 and 2020:

Three Months Ended

Six Months Ended

Nine Months Ended

(in thousands) 2021 2020 2021 2020

14 unchanged sentences

At maturity, the holders of the 2024 Convertible Notes will be entitled to receive cash equal to the principal of the 2024 Convertible Notes plus accrued interest.

The carrying amount of the 2024 Convertible Notes as a separate equity-classified instrument (the “2024 Convertible Notes Embedded Derivative”) included in “Additional paid-in capital” in our condensed consolidated balance sheets as of March 31, 2021 was $ 39.8 million, ($ 25.3 million, net of tax).

The effective interest rate for the three and six months ended March 31, 2021 was approximately 9 %.

As of March 31, 2021, the remaining unamortized debt discount and issuance costs will be amortized through the 2024 Maturity Date assuming no early conversion.

The carrying amount of the 2024 Convertible Notes as a separate equity-classified instrument (the “2024 Convertible Notes Embedded Derivative”) included in “Additional paid-in capital” in our condensed consolidated balance sheets as of June 30, 2021 was $ 39.8 million, ($ 25.3 million, net of tax).

The effective interest rate for the three and nine months ended June 30, 2021 was approximately 9 %.

As of June 30, 2021, the remaining unamortized debt discount and issuance costs will be amortized through the 2024 Maturity Date assuming no early conversion.

The 2024 Convertible Notes are convertible into cash or shares of Class A Common Stock, or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2017 Indenture, based on an initial conversion rate of 100 shares of Class A Common Stock per $1,000 principal amount of 2024 Convertible Notes (equivalent to an initial conversion price of $ 10.00 per share of Class A Common Stock).

2 unchanged sentences

If, among other triggers described in the 2017 Indenture, the market price of the Class A Common Stock meets the threshold based on at least 20 of the final 30 trading days of the quarter for the 2024 Convertible Notes to become convertible at the option of the holders during the subsequent quarter, we may be required to classify the 2024 Convertible Notes as current on our condensed consolidated balance sheets for each quarter in which such triggers are met.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2021.

As of March 31, 2021, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of June 30, 2021.

As of June 30, 2021, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount.

2.375 % 2025 Convertible Senior Notes Due 2025

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The 2025 Convertible Notes pay interest semi-annually in arrears at a rate of 2.375 % per annum on May 1 and November 1 of each year, commencing November 1, 2018, and mature on May 1, 2025 (the "2025 Maturity Date"), unless converted, redeemed or repurchased in accordance with the terms prior to such date.

The carrying amount of the 2025 Convertible Notes as a separate equity-classified instrument (the “2025 Convertible Notes Embedded Derivative”) included in “Additional paid-in capital” in our condensed consolidated balance sheets as of March 31, 2021 was $ 49.6 million, ($ 39.1 million, net of tax).

The effective interest rate for the three and six months ended March 31, 2021 was approximately 9 %.

As of March 31, 2021, the remaining unamortized debt discount and issuance costs will be amortized through the 2025 Maturity Date assuming no early conversion.

The carrying amount of the 2025 Convertible Notes as a separate equity-classified instrument (the “2025 Convertible Notes Embedded Derivative”) included in “Additional paid-in capital” in our condensed consolidated balance sheets as of June 30, 2021 was $ 49.6 million, ($ 39.1 million, net of tax).

The effective interest rate for the three and nine months ended June 30, 2021 was approximately 9 %.

As of June 30, 2021, the remaining unamortized debt discount and issuance costs will be amortized through the 2025 Maturity Date assuming no early conversion.

The 2025 Convertible Notes are convertible into cash or shares of Class A Common Stock, or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2018 Indenture, based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount of 2025 Convertible Notes (equivalent to an initial conversion price of $ 15.90 per share of Class A Common Stock).

2 unchanged sentences

If, among other triggers described in the 2018 Indenture, the market price of the Class A Common Stock meets the threshold based on at least 20 of the final 30 trading days of the quarter for the 2025 Convertible Notes to become convertible at the option of the holders during the subsequent quarter, we may be required to classify the 2025 Convertible Notes as current on our condensed consolidated balance sheets for each quarter in which such triggers are met.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2021.

As of March 31, 2021, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount.

The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of June 30, 2021.

As of June 30, 2021, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount.

CASHMA X Secured Borrowing Facility

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We recognized the effect on the consolidated financial statements in the period ended March 31, 2020.

For the period ended March 31, 2021, the CARES Act has not had a material impact on our consolidated financial statements.

For the period ended June 30, 2021, the CARES Act has not had a material impact on our consolidated financial statements.

At this time, we do not expect the impact of the CARES Act to have a material impact on our consolidated financial statements for the year ending September 30, 2021.

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The following tables present revenue for each reportable segment, disaggregated revenue within our three reportable segments and Corporate, segment profits and segment contribution.

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

(in thousands) U.S.

13 unchanged sentences

Depreciation and amortization 2,600 1,806 — 4,406 3,013 7,419

Loss on sale or disposal of assets and other — 101 — 101 11 112

Other charges — 497 — 497 — 497

Interest expense — — — — 5,569 5,569

1 unchanged sentence

Equity in net income of unconsolidated affiliates — — ( 643 ) ( 643 ) — ( 643 )

Other expense — 85 9 94 51 145

Other (income) expense — ( 5 ) 18 13 52 65

Segment contribution $ 18,149 $ 3,566 $ 714 $ 22,429

Income (loss) before income taxes $ 22,429 $ ( 23,195 ) $ ( 766 )

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

(in thousands) U.S.

12 unchanged sentences

General and administrative — — — — 16,176 16,176

Impairment of goodwill, intangible and other assets 10,000 35,936 1,124 47,060 — 47,060

Depreciation and amortization 2,749 1,647 3 4,399 3,280 7,679

6 unchanged sentences

Loss before income taxes $ 14,345 $ ( 24,583 ) $ ( 10,238 )

Six Months Ended March 31, 2021

Nine Months Ended June 30, 2021

(in thousands) U.S.

7 unchanged sentences

Jewelry scrapping cost of goods sold 7,871 8,205 — 16,076 — 16,076

Other cost of revenues — — — — —

Net revenues 260,905 68,916 338 330,159 — 330,159

4 unchanged sentences

Loss on sale or disposal of assets and other 27 — — 27 63 90

Other charges — 497 — 497 — 497

Interest expense — — — — 16,542 16,542

4 unchanged sentences

Income (loss) before income taxes $ 78,729 $ ( 67,194 ) $ 11,535

Six Months Ended March 31, 2020

Nine Months Ended June 30, 2020

(in thousands) U.S.

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The following table provides supplemental information on net amounts included in our condensed consolidated balance sheets:

(in thousands) March 31, 2021 March 31, 2020 September 30,

(in thousands) June 30, 2021 June 30, 2020 September 30,

Gross pawn service charges receivable $ 31,648 $ 23,674 $ 27,259

15 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.

What changed 10-Q

Item 1. Financial Statements