What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-11-16 compared with 2021-11-17 · 389 added, 397 removed, 869 unchanged (47% of the section changed)

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Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (BDO USA, LLP;

Dallas, Texas;

PCAOB ID # 243 )

Consolidated Financial Statements:

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Consolidated Statements of Operations for each of the three years ended September 30, 2022, 2021 and 2020

Consolidated Statements of Comprehensive Income (Loss) for each of the three years ended September 30, 2021, 2020 and 2019

Consolidated Statements of Comprehensive Income (Loss) for three years ended September 30, 2022, 2021 and 2020

Consolidated Statements of Stockholders’ Equity for each of the three years ended September 30, 2022, 2021 and 2020

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Subsequent Events

Quarterly Information (Unaudited)

Report of Independent Registered Public Accounting Firm

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of September 30, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated November 16, 2022, expressed an unqualified opinion thereon.

Adoption of New Accounting Standard

As is discussed in Notes 1 and 12 to the consolidated financial statements, the Company changed its method of accounting for leases in the year ended September 30, 2020, due to adoption of ASC Topic 842, Leases .

Change in Accounting Principle

As is discussed in Notes 1 and 9 to the consolidated financial statements, the Company changed its method of accounting for convertible debt as of October 1, 2021, due to the adoption of Accounting Standards Update 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815–40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

Basis for Opinion

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The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for Bajio Leases

As described in Note 3 to the Company’s consolidated financial statements, the Company recorded approximately $10.7 million of right-of-use assets and lease liabilities on June 8, 2021, in connection with the Company’s acquisition of 100% of the common shares of PLO del Bajio S.

These leases primarily relate to the 128 pawn stores which were added to the Company’s geographic footprint within Mexico as a result of the acquisition.

We identified the accounting for the leases recorded as a result of the Bajio acquisition as a critical audit matter.

Accounting for the acquired leases required management’s individual assessment of the varying terms of the large volume of leases acquired, and the estimation of the appropriate incremental borrowing rate for each lease.

Auditing these elements involved especially challenging audit effort due to the volume

of leases acquired, as well as the specialized skills and knowledge required to assess the reasonableness of the incremental borrowing rates estimated by management.

The primary procedures we performed to address this critical audit matter included:

• Examining a sample of lease agreements, which required language translation, to determine that the varying terms were appropriately interpreted and accurately utilized in management’s calculation of the right-of-use asset and lease liability balances.

• Verifying that the lease liability balances were properly recognized as of the acquisition date, by testing the accuracy of the initial measurement of the lease liabilities for a sample of leases, including verifying that the present value of the lease payments was clerically accurate and the Company correctly applied the provisions of ASC 842.

• Utilizing personnel with specialized knowledge and skills in valuation to assist in assessing the reasonableness of the incremental borrowing rates estimated by management.

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for Investment in Founders One, LLC

As described in Note 5 to the Company’s consolidated financial statements, the Company invested $15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders One, LLC (the “Founders Investment”), a newly formed entity with one other member.

The Company concluded that Founders One, LLC is a variable interest entity (“VIE”) but because the Company is not the primary beneficiary, it is not consolidated.

The Company accounts for the investment in accordance with Accounting Standards Codification 321, Investments-Equity Securities , utilizing the measurement alternative available for equity securities without a readily determinable fair value.

We identified the Company’s accounting for the Founders Investment as a critical audit matter.

Determination of the accounting treatment for the Founders Investment required complex evaluation of whether the investment entity meets the definition of, and potentially consolidates as a VIE, or whether other investment accounting guidance applies.

Auditing management’s conclusions with respect to the Founders Investment required an increased level of audit effort, including the involvement of professionals with additional experience in consolidation and investment accounting assessments.

The procedures we performed to address this critical audit matter included:

• Analyzing the Founders One, LLC Operating Agreement to assess the reasonableness of management’s accounting treatment for the investment.

• Utilizing personnel with increased knowledge and experience in the area of accounting for consolidation and investment assessments to assist in evaluating the appropriateness of management’s conclusion on the accounting for the Founders Investment.

/s/ BDO USA, LLP

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Investments in unconsolidated affiliates 37,733 37,724

Other investments 24,220 —

Property and equipment, net 56,725 53,811

Right-of-use asset, net 200,990 183,809

Right-of-use assets, net 221,586 200,990

Goodwill 286,828 285,758

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Current liabilities:

Current maturities of long-term debt, net $ — $ 213

Accounts payable, accrued expenses and other current liabilities $ 84,509 $ 90,268

Customer layaway deposits 16,023 12,557

Lease liability 52,263 49,742

Operating lease liabilities, current 52,334 52,263

Total current liabilities 152,866 155,088

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Deferred tax liability, net 373 3,684

Lease liability 161,330 153,040

Operating lease liabilities 180,756 161,330

Other long-term liabilities 8,749 10,385

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Other cost of revenues — — 1,054

Net revenues 449,485 449,201 494,448

Gross profit 528,147 449,485 449,201

Operating expenses:

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Depreciation and amortization 32,140 30,672 30,827

Loss on sale or disposal of assets and other 83 801 4,399

(Gain) loss on sale or disposal of assets and other ( 674 ) 83 801

Other charges — 229 20,388

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Equity in net (income) loss of unconsolidated affiliates ( 1,779 ) ( 3,803 ) 2,429

Impairment of investment in unconsolidated affiliates — — 19,725

Other (income) expense ( 790 ) ( 17 ) 1,424

Income (loss) from continuing operations before income taxes 16,062 ( 70,095 ) 4,174

Other income ( 167 ) ( 790 ) ( 17 )

Income (loss) before income taxes 67,713 16,062 ( 70,095 )

Income tax expense (benefit) 17,553 7,450 ( 1,632 )

Income (loss) from continuing operations, net of tax 8,612 ( 68,463 ) 1,768

Loss from discontinued operations, net of tax — — ( 457 )

Net income (loss) 50,160 8,612 ( 68,463 )

Net loss attributable to noncontrolling interest — — ( 1,230 )

Net income (loss) attributable to EZCORP, Inc.

$ 8,612 $ ( 68,463 ) $ 2,541

Basic earnings (loss) per share attributable to EZCORP, Inc.

— continuing operations $ 0.15 $ ( 1.24 ) $ 0.05

Diluted earnings (loss) per share attributable to EZCORP, Inc.

— continuing operations $ 0.15 $ ( 1.24 ) $ 0.05

Basic earnings (loss) per share $ 0.89 $ 0.15 $ ( 1.24 )

Diluted earnings (loss) per share $ 0.70 $ 0.15 $ ( 1.24 )

Weighted-average basic shares outstanding 56,498 55,744 55,313

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Comprehensive income (loss) $ 52,906 $ 18,265 $ ( 84,141 )

Comprehensive loss attributable to noncontrolling interest — — ( 1,230 )

Comprehensive income (loss) attributable to EZCORP, Inc.

$ 18,265 $ ( 84,141 ) $ ( 7,501 )

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Noncontrolling Interest Total Equity

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Total Equity

(in thousands) Shares Par

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Taxes paid related to net share settlement of equity awards — — ( 1,435 ) — — ( 1,435 )

Transfer of subsidiary shares to noncontrolling interest — — 3,195 — — ( 3,195 ) —

Foreign currency translation loss — — — ( 8 ) ( 15,670 ) ( 15,678 )

Deconsolidation of subsidiary — — — — — 7,756 7,756

Net income (loss) — — — 2,541 — ( 1,230 ) 1,311

Purchase and retirement of treasury stock ( 943 ) ( 11 ) ( 2,624 ) ( 2,523 ) — ( 5,158 )

Net loss — — — ( 68,463 ) — ( 68,463 )

Balances as of September 30, 2020

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Stock compensation — — 3,946 — — 3,946

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

Transfer of consideration for prior period acquisition 33 — 185 — — 185

Release of restricted stock 508 7 — — — 7

Taxes paid related to net share settlement of equity awards — — ( 839 ) — — ( 839 )

Foreign currency translation loss — — — ( 8 ) ( 15,670 ) — ( 15,678 )

Purchase and retirement of treasury stock ( 943 ) ( 11 ) ( 2,624 ) ( 2,523 ) — — ( 5,158 )

Net loss — — — ( 68,463 ) — — ( 68,463 )

Foreign currency translation gain — — — — 9,653 9,653

Net income — — — 8,612 — 8,612

Balances as of September 30, 2021

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Stock compensation — — 5,053 — — 5,053

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

Transfer of consideration for prior period acquisition 33 — 185 — — — 185

Transfer of consideration for other investment 213 2 1,498 — — 1,500

Release of restricted stock 393 4 — — — 4

Taxes paid related to net share settlement of equity awards — — ( 792 ) — — ( 792 )

Cumulative effect of adoption of ASU 2020-06 (Note 1) — — ( 62,804 ) 26,166 — ( 36,638 )

Foreign currency translation gain — — — — 2,746 2,746

Purchase and retirement of treasury stock ( 238 ) ( 2 ) ( 937 ) ( 1,101 ) — ( 2,040 )

Net income — — — 50,160 — 50,160

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Provision for inventory reserve ( 2,253 ) ( 8,003 ) 2,577

Reserve on jewelry scrap receivable — — 3,646

Stock compensation expense 5,053 3,946 ( 5,094 )

Equity in net (income) loss from investment in unconsolidated affiliates ( 1,779 ) ( 3,803 ) 2,429

Impairment of investment in unconsolidated affiliates — — 19,725

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

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Income taxes ( 2,785 ) 2,180 ( 4,715 )

Dividends from unconsolidated affiliates 3,366 — —

Net cash provided by operating activities 66,535 46,438 49,078

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Acquisitions, net of cash acquired ( 1,850 ) ( 19,015 ) —

Issuance of note receivable ( 1,000 ) — —

Investment in unconsolidated affiliate ( 6,927 ) — —

Investment in other investments ( 16,500 ) — —

Principal collections on notes receivable — — 8,000

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Payments on assumed debt and other borrowings — ( 15,414 ) ( 198 )

Repurchase of common stock — ( 5,158 ) —

Purchase and retirement of treasury stock ( 2,040 ) — ( 5,158 )

Net cash used in financing activities ( 2,832 ) ( 16,253 ) ( 6,253 )

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Cash and cash equivalents and restricted cash at end of period $ 214,369 $ 263,624 $ 312,553

Supplemental disclosure of cash flow information

Cash and cash equivalents $ 253,667 $ 304,542 $ 157,567

Restricted cash 9,957 8,011 4,875

Total cash and cash equivalents and restricted cash $ 263,624 $ 312,553 $ 162,442

Cash paid during the period for interest $ 8,230 $ 8,489 $ 12,900

Cash paid during the period for income taxes, net $ 3,696 $ 9,753 $ 11,132

Non-cash investing and financing activities:

Pawn loans forfeited and transferred to inventory $ 212,756 $ 241,252 $ 301,357

Transfer of consideration for current period acquisition 1,545 — —

Acquisition earn-out contingency 4,608 — —

Accrued acquisition consideration held as restricted cash 1,986 — —

See accompanying notes to consolidated financial statements.

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Description of Business

was founded in 1989 and is a leading provider of pawn services in the United States and Latin America.

was founded in 1989 and is a provider of pawn services in the United States and Latin America.

At our pawn stores, we advance cash against the value of collateralized personal property.

We also sell merchandise, primarily collateral forfeited from pawn activities and pre-owned merchandise purchased from customers.

We are dedicated to satisfying the short-term cash needs of consumers, with a focus on delivering an industry-leading customer experience.

We fulfill short-term cash needs to consumers, with a focus on delivering an industry-leading customer experience.

As of September 30, 2022, we operated a total of 1,175 locations, consisting of:

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We have an equity interest ( 41.6 % as of September 30, 2022) in Cash Converters International Limited (“Cash Converters”), a publicly traded company (ASX:CCV) headquartered in Perth, Western Australia.

Cash Converters and its controlled companies comprise a diverse group generating revenues from franchising, store operations, personal finance (including pawn transactions) and vehicle finance, controlling over 700 stores across 15 countries.

Subsequent Events .

We also own 13.14 % of Rich Data Corporation (“RDC”), a Singapore-based software-as-a-service company that utilizes global financial services expertise, advanced artificial intelligence and non-traditional data to deliver a next-generation credit scoring and decisioning platform.

Basis of Presentation and Principles of Consolidation

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All inter-company accounts and transactions have been eliminated in consolidation.

We have reclassified certain amounts in prior-period financial statements to conform to the current period’s presentation.

Use of Estimates and Assumptions

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We base our estimate of collectability on several inputs, including recent redemption rates, historical trends in redemption rates and the amount of loans due in the following months.

Unexpected variations in any of these factors could change our estimate of collectibality and affect our results of operations and financial condition.

Unexpected variations in any of these factors could change our estimate of collectibility and affect our results of operations and financial condition.

If a pawn loan is not repaid, the forfeited collateral is recorded as inventory at the lower of the principal balance of the pawn loan or the net realizable value of the item.

Of our consolidated pawn loans outstanding balance of $ 175.9 million as of September 30, 2021, $ 63.9 million ( 36 %) is attributable to stores in Texas and $ 19.8 million ( 11 %) is attributable to stores in Florida.

As of September 30, 2022, consolidated pawn loans outstanding was $ 210.0 million, of which $ 81.3 million ( 39 %) is attributable to stores in Texas and $ 22.6 million ( 11 %) is attributable to stores in Florida.

Merchandise Sales Revenue Recognition

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Included in “Merchandise cost of goods sold” during fiscal 2020, is $ 2.6 million of expense for inventory provisions primarily related to the write-off of excess and obsolete inventory due to the impacts of COVID-19.

Such charges were not material during fiscal 2021.

With respect to our Mexico pawn operations, we do not own the forfeited collateral.

However, we assume the risk of loss on such collateral and are solely responsible for its care and disposition and, therefore, record such collateral as inventory in our Consolidated Balance Sheets.

As of September 30, 2021 and 2020, respectively, $ 22.6 million and $ 12.9 million of the balance recorded as inventory in our Consolidated Balance Sheets was from our Mexico pawn operations.

As of September 30, 2022 and 2021, inventory related to our Mexico pawn operations was $ 29.8 million and $ 22.6 million, respectively.

Cash and Cash Equivalents and Cash Concentrations

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Equity Method Investments

We account for our investment in Cash Converters and RDC under the equity method.

We account for our investment in Cash Converters under the equity method.

Because the fiscal year of Cash Converters ends three months before our fiscal year, we record our interest from the results of Cash Converters on a three-month lag.

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The actual results of Cash Converters may vary from our estimates.

We determine if an arrangement contains a lease at inception.

We have elected not to recognize on the balance sheet leases with terms of one year or less as a practical expedient.

Operating lease and financing lease assets are included in Right-of-use assets, net on the Consolidated Balance Sheets.

We enter into operating lease agreements for real estate related to pawn locations and corporate offices.

We determine if an arrangement contains a lease at inception by determining whether there is an identified asset and whether the arrangement conveys the right to control the use of the identified asset.

Operating lease liabilities are recognized at the lease commencement date based on the present value of fixed lease payments using the Company’s incremental borrowing rate.

We have entered into financing lease agreements mainly for motor vehicles.

Operating and financing lease liabilities are recognized at the lease commencement date based on the present value of fixed lease payments using the Company’s incremental borrowing rate.

As our leases generally do not include an implicit rate, we compute our incremental borrowing rate based on information available at the lease commencement date applying the portfolio approach to groups of leases with similar characteristics.

Right-of-use operating assets are recognized based on the initial present value of fixed lease payments over the lease term.

Our lease terms include options to extend the lease when it is reasonably certain we will exercise its option.

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We evaluate renewal options periodically for any changes in assumptions.

Effective October 1, 2019, we adopted ASC Topic 842:

Effective October 1, 2019, we adopted the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 842:

Leases (“ASC 842”).

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We recognize lease expense on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred.

Our lease portfolio consists of pawn locations and corporate offices with lease terms ranging from three to ten years , including options to renew.

Our operating lease portfolio consists of pawn locations and corporate offices with lease terms ranging from three to ten years , including options to renew.

Our financing lease terms range from two to five years .

We generally account for the initial lease term of our pawn locations as up to ten years .

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When we perform a quantitative goodwill impairment test, we estimate the fair value of the reporting unit using an income approach based on the present value of expected future cash flows, including terminal value, utilizing a market-based weighted average cost of capital (“WACC”) determined separately for each reporting unit.

The determination of fair value involves the use of estimates and assumptions, including revenue growth rates, operating margins and terminal growth rates discounted by an estimated WACC derived from other publicly traded

companies that are similar but not identical to us from an operational and economic standpoint.

The determination of fair value involves the use of estimates and assumptions, including

revenue growth rates, operating margins and terminal growth rates discounted by an estimated WACC derived from other publicly traded companies that are similar but not identical to us from an operational and economic standpoint.

We use discount rates that are commensurate with the risks and uncertainties inherent in the respective businesses and in our internally developed forecasts.

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Convertible Debt Securities

In accounting for our convertible debt securities at issuance, we separated the securities into debt and equity components pursuant to the accounting standards for convertible debt instruments that may be fully or partially settled in cash upon conversion.

The carrying value of the liability components was calculated by measuring the fair value of similar liabilities that do not have an associated conversion feature, including discount rates of approximately 8 %.

The excess of the principal amount over the fair value of the liability component was recorded as a discount with a corresponding increase in additional paid-in capital.

The debt discounts will be accreted to “Interest expense” over the respective terms of the convertible debt securities using the effective interest method.

The amount recorded to “Additional paid-in capital” will not be remeasured as long as they continue to meet the conditions for equity classification.

We account for the conversion premium of the convertible debt securities under the treasury method in accordance with our accounting policy, which assumes settlement of the conversion premium (equal to the as-converted value over the face principal amount) in shares of our Class A Common Stock.

Prior to our adoption of Accounting Standards Update 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40) , (“ASU 2020-06”) , on October 1, 2021, we accounted for our convertible debt securities at issuance, by separating the securities into debt and equity components pursuant to the prior accounting standards for convertible debt instruments.

The carrying value of the liability components were calculated by measuring the fair value of similar liabilities that did not have an associated conversion feature.

The excess of the principal amount over the fair value of the liability component were recorded as a discount with a corresponding increase in additional paid-in capital.

The debt discounts were accreted to “Interest expense” over the respective terms of the convertible debt securities using the effective interest method.

The conversion premium of the convertible debt securities were accounted for under the treasury method in accordance with our previous accounting policy, which assumed settlement of the conversion premium (equal to the as-converted value over the face principal amount) in shares of our Class A Common Stock.

See Recently Adopted Accounting Policies within this Note 1 :

S ummary of S ignificant Accounting Policies for a discussion of the adoption of ASU 2020-06 and related impact.

Foreign Currency

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Foreign currency transaction gains and losses not accounted for as translations are included in “Other expense (income)” in our Consolidated Statements of Operations.

These gains were $ 0.1 million, $ 0.5 million and $ 0.3 million for fiscal 2021, 2020 and 2019, respectively.

These gains were $ 0.1 million and $ 0.5 million for fiscal 2021 and 2020, respectively.

There was no net gain or loss for fiscal 2022.

Store Expenses

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Stock Compensation

We measure share-based compensation expense at the grant date based on the price of underlying shares at that date and recognize it as expense, net of estimated forfeitures, ratably over the vesting or service period, as applicable, of the stock award.

We measure share-based compensation expense at the grant date based on the price of underlying shares at that date and recognize it as expense ratably over the vesting or service period, as applicable, of the stock award.

Our policy is to recognize expense on performance-based awards, where satisfaction of the performance condition is probable, ratably over the awards’ vesting period and recognize expense on awards that only have service requirements on a straight-line basis.

We recognize forfeitures as they occur, and no longer estimate forfeitures when calculating share-based compensation expense.

We account for income taxes using the asset and liability method.

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We adjust these reserves in light of changing facts and circumstances, such as the closing of an audit or the refinement of an estimate.

Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Changes in recognition or measurement are reflected in the

period in which the change in judgment occurs.

We believe adequate provisions for income taxes have been made for all periods.

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We compute basic earnings per share based on the weighted average number of shares of common stock outstanding during the period.

We compute diluted earnings per share based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding, including conversion features embedded in our outstanding convertible debt, during the period using the treasury stock method.

Dilutive potential common shares include outstanding restricted stock awards as well as shares issuable on conversion of our outstanding convertible debt securities and exercise of outstanding warrants.

We calculate diluted earnings per share based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method.

Dilutive potential common shares include outstanding restricted stock awards as well as shares issuable on conversion of our outstanding convertible debt securities.

Potential common shares are required to be excluded from the computation of diluted earnings per share if the assumed proceeds upon exercise or vest are greater than the cost to re-acquire the same number of shares at the average market price, and therefore the effect would be anti-dilutive.

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When we are in a loss position for the period, dilutive securities are excluded from the calculation of earnings per share, as they would have an anti-dilutive effect.

Prior to our adoption of ASU 2020-06 on October 1, 2021, diluted earnings per share included the effect of dilutive potential associated with the conversion features embedded in our outstanding convertible debt using the treasury stock method.

See Recently Adopted Accounting Policies within this Note 1:

Summary of Significant Accounting Policies and Note 4:

E arnings ( L oss) Per Share for further discussions of the adoption of ASU 2020-06 and related impact.

Our capital stock consists of two classes of common stock designated as Class A Non-Voting Common Stock (“Class A Common Stock”) and Class B Voting Common Stock (“Class B Common Stock”).

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We are required to reserve the number of authorized but unissued shares of Class A Common Stock that would be issuable upon conversion of all outstanding shares of Class B Common Stock.

Impact of COVID-19

The COVID-19 pandemic continues to affect the U.S.

and global economies, and as previously disclosed in our 2020 Annual Report, the pandemic also affected our businesses in a variety of ways beginning in the second quarter of fiscal 2020 and continuing into fiscal 2021.

We cannot estimate the length or severity of the COVID-19 pandemic or the related financial consequences on our business and operations, including whether and when historic economic and operating conditions will resume or the extent to which the disruption may impact our business, financial position, results of operations or cash flows.

Our estimates, judgments and assumptions related to COVID-19 could ultimately differ over time.

Recently Adopted Accounting Policies

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”).

ASU 2016-13 modifies the measurement of expected credit losses of certain financial instruments, requiring entities to estimate an expected lifetime credit loss on financial assets.

The ASU amends the impairment model to utilize an expected loss methodology and replaces the incurred loss methodology for financial instruments including trade receivables.

The amendment requires entities to consider other factors, such as historical loss experience, current conditions and reasonable and supportable forecasts.

ASU 2016-13 was effective on October 1, 2020.

We adopted ASU 2016-13 effective October 1, 2020 using the modified retrospective approach.

There was no net cumulative effect adjustment to retained earnings as of October 1, 2020 as a result of this adoption.

This amendment did not have a material impact on our balance sheets or cash flows from operations and did not have a material impact on our operating results.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform ( Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-004”).

ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate.

ASU 2020-04 is effective upon issuance through December 31, 2022.

This ASU has not had a significant impact on our consolidated financial statements and related disclosures to date.

We will continue to assess the applicability to any future arrangements.

Effective October 1, 2019, we adopted Accounting Standards Codification (“ASC”) 842, Leases, which requires companies to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet using the modified retrospective method provided under ASU 2018-11, Leases (Topic 842) — Targeted Improvements .

Additionally, we elected the package of practical expedients under ASC 842 as well as the transition guidance elections to not separate lease and non-lease components for leases under ASC 842.

Further, we have elected an accounting policy to not record right-of-use assets and lease liabilities for leases that have a duration of 12 months or less.

Leases for additional discussion.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40) , (“ASU 2020-06”).

ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity.

2020-06 amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years.

The ASU 2020-06 amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

We plan to early adopt this standard as of October 1, 2021 under the modified retrospective basis.

Under this transition method, prior period financial information and disclosures will not be adjusted and will continue to be reported under the accounting standards that were in effect prior to our adoption of ASU 2020-06.

The cash conversion model, which the Company has historically used to account for its convertible debt instruments, was eliminated by ASU 2020-06.The adoption of ASU 2020-06 will reduce non-cash interest expense in future periods due to the derecognition of the debt discount associated with the bifurcated equity component of our convertible notes.

We adopted this standard as of October 1, 2021 under the modified retrospective basis.

Under this transition method, prior period financial information and disclosures were not adjusted and continued to be reported under the accounting standards that were in effect prior to our adoption of ASU 2020-06.

The cash conversion model, which the Company has historically used to account for its convertible debt instruments, was eliminated by ASU 2020-06.The adoption of ASU 2020-06 reduced non-cash interest expense for the year ending September 30, 2022 and in future periods due to the derecognition of the debt discount associated with the bifurcated equity component of our convertible notes.

The treasury stock method for calculating earnings per share will no longer be allowed for convertible debt instruments whose principal amount may be settled using shares, instead the if-converted method will be required to determine the dilutive effect of our convertible notes.

Impact of the Adoption of ASU 2020-06

On October 1, 2021, we early adopted ASU 2020-06 on a modified retrospective basis.

Under ASU 2020-06, we no longer separate the convertible senior notes into liability and equity components.

We recognized a cumulative effect of initially applying the ASU as an adjustment to the October 1, 2021 opening balance of retained earnings.

The conversion option that was previously accounted for in equity under the cash conversion model was recombined into the convertible debt outstanding, and as a result, additional paid in capital and the related unamortized debt discount on the convertible senior notes were reduced.

The removal of the remaining debt discounts recorded for this previous separation has the effect of increasing our net debt balance.

The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods.

(in thousands) As Reported

September 30, 2021 Adjustments Under ASU 2020-06

October 1, 2021

Principal $ 316,250 $ — $ 316,250

Unamortized debt discount ( 48,785 ) 48,785 —

Deferred financing costs, net ( 3,279 ) ( 1,500 ) ( 4,779 )

Net carrying amount 264,186 47,285 311,471

Deferred tax asset 9,746 6,607 16,353

Deferred tax liability 3,684 ( 4,040 ) ( 356 )

Additional paid-in capital 403,312 ( 62,804 ) 340,508

Retained earnings 326,781 26,166 352,947

The impact of adoption on our consolidated statements of operations for the fiscal year ended September 30, 2022 was primarily to decrease interest expense by $ 13.9 million.

This had the effect of increasing both our basic and diluted earnings per share for the fiscal year ended September 30, 2022 by $ 0.19 , and $ 0.01 , respectively.

Additionally, adoption of the standard requires interest charges on the convertible debt to be added to net income as well as the use of the “if-converted” method to calculate diluted earnings per common share.

Refer to Note 4:

Earnings Per Share for a discussion of the effect of the convertible notes on diluted earnings per common share.

Recently Issued Accounting Pronouncements

We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact on our Consolidated Financial Statements.

OTHER CHARGES

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

There were no additional charges recorded for fiscal year ended September 30, 2022.

Accrued charges at September 30, 2022 were $ 0.2 million and $ 2.0 million related to store closure costs and other costs, respectively.

We recorded $ 0.2 million of charges for the fiscal year ended September 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 September 30, 2021

Cash charges:

Labor reduction costs $ 5,946 $ — $ 5,623 $ 323

CASHMAX shutdown costs 800 — 800 —

Store closure costs 1,806 229 1,806 229

Other 2,166 — 166 2,000

$ 10,718 $ 229 $ 8,395 $ 2,552

We recorded $ 20.4 million of charges for the fiscal year ended September 30, 2020, as summarized below:

• $ 6.4 million in severance and other payroll-related costs related to a headcount reduction in the corporate office;

• $ 4.9 million in costs related to the closure of the CASHMAX business and related operations, primarily consisting of severance and other payroll-related costs, net asset write-offs, impairment of internally developed software and contract termination costs;

• $ 4.1 million in costs primarily related to the closure of four stores in U.S.

Pawn and three stores in Latin America Pawn, consisting primarily of severance and other payroll-related costs and reserves on net assets;

• $ 5.0 million in other miscellaneous charges, primarily consisting of impairment of internally developed software and contract termination costs.

(in thousands) Accrued Charges at September 30, 2019 Charges Payments and Adjustments Accrued Charges at September 30, 2020

Cash charges:

Labor reduction costs $ — $ 6,438 $ 492 $ 5,946

CASHMAX shutdown costs — 1,751 951 800

Store closure costs — 1,806 — 1,806

Other — 2,486 320 2,166

$ — $ 12,481 $ 1,763 $ 10,718

Non-cash charges:

Labor reduction costs $ —

CASHMAX shutdown costs 3,092

Store closure costs 2,328

Accrued charges at September 30, 2021 were $ 0.3 million, $ 0.2 million and $ 2.0 million related to labor reduction cost, store closure costs and other costs, respectively.

We recorded $ 20.4 million of aggregate charges for the fiscal year ended September 30, 2020 related to $ 6.4 million in labor reduction costs, $ 4.9 million in CASHMAX shutdown costs, $ 4.1 million in store closure costs and $ 5.0 million of other costs.

Accrued charges at September 30, 2020 were $ 5.9 million, $ 0.8 million, $ 1.8 million and $ 2.2 million related to labor reduction costs, CASHMAX shutdown costs, store closure costs and other costs respectively.

Fiscal 2021 Acquisitions

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These stores operate under the name "Cash Apoyo Efectivo" and are located principally in the Mexico City metropolitan area.

The total consideration for Bajio was $ 23.6 million, consisting of $ 17.4 million of cash, and 212,870 shares of our Class A Non-Voting Common Stock valued at $ 1.6 million.

In addition, t he sellers are entitled to additional payments of up to $ 4.6 million to be paid in two payments over the next two years , contingent on the growth of the loan portfolios of the acquired stores.

At the time of acquisition, the total consideration for Bajio was $ 23.6 million, consisting of $ 17.4 million of cash, and 212,870 shares of our Class A Non-Voting Common Stock valued at $ 1.6 million.

In addition, the sellers are entitled to additional payments of up to $ 4.6 million to be paid in two payments over the next two years , contingent on the growth of the loan portfolios of the acquired stores.

Up to 50 % of any future contingent payments can be made in shares of our Class A Non-Voting Common Stock at our discretion.

The value of the contingent consideration was included in the total consideration as the metrics were considered achievable on the date of acquisition.

Cash paid at closing was $ 11.6 million and $ 3.8 million was paid in the fourth quarter of the fiscal year.

Of the remaining $ 2.0 million, $ 1.6 million is expected to be paid prior to June 30, 2022, and $ 0.4 million is expected to be paid on or around the fifth anniversary of the date of acquisition .

Cash paid at closing was $ 11.6 million and $ 3.8 million was paid during the fourth quarter of 2021.

During the first quarter of fiscal 2022, both parties completed the formal working capital reconciliation stipulated within the purchase agreement.

As part of the working capital reconciliation, the Company and the seller agreed to reduce the purchase price, which was held in restricted cash as of September 30, 2021, by $ 1.3 million.

As the working capital adjustment was recorded as of September 30, 2021, this reduction to the purchase price is a measurement period adjustment, and resulted in a $ 1.3 million reduction to goodwill during the period ended December 31, 2021.

This reduced the total consideration for Bajio to $ 22.3 million.

As the future payments decreased, we released $ 1.3 million of the previously held $ 2.0 million in restricted cash to our unrestricted cash.

Of the remaining $ 0.6 million in restricted cash as of June 30, 2022, $ 0.3 million was paid during July 2022, and the remaining $ 0.3 million is expected to be paid on or around the fifth anniversary of the date of acquisition.

During the second quarter of fiscal 2022, we obtained new information about the seller's calculation of pawn service charges receivable balance as of the date of acquisition, which resulted in a $ 0.7 million measurement period adjustment to reduce pawn service charges receivable and increase goodwill.

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

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The results of Bajio have been included in our condensed consolidated financial statements from the date of acquisition in our Latin America Pawn segment.

The acquired business contributed revenues of $ 9.6 million and net loss of $ 0.1 million during the period subsequent to acquisition.

The acquired business contributed revenues of $ 9.6 million and net loss of $ 0.1 million during the fiscal year 2021.

On June 9, 2021, we repaid $ 14.9 million of Bajio’s existing debt assumed in the acquisition.

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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.

Fiscal Years Ended September 30,

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Diluted earnings (loss) per common share $ 0.16 $ ( 1.18 )

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.

We did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma gross profit 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 fiscal year end ended September 30, 2021, we incurred total acquisition-related costs of $ 0.8 million.

The acquisition-related costs were primarily related to legal, accounting and consulting services and were expensed as incurred through September 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, enhancing our position in this strategically important market.

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

EARNINGS (LOSS) PER SHARE

The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to EZCORP Inc., shareholders:

The following table reconciles the number of common shares used to compute basic and diluted earnings per common share:

Fiscal Year Ended September 30,

(in thousands, except per share amounts) 2022 2021 2020

Net income (loss) $ 8,612 $ ( 68,463 ) $ 2,541

Earnings per common share

Average common share outstanding (denominator) 55,744 55,313 55,341

Earnings (loss) per common share $ 0.15 $ ( 1.24 ) $ 0.05

Diluted earnings per common share

Average common share outstanding 55,744 55,313 55,341

Dilutive effect of restricted stock and convertible notes* 205 — 643

Diluted average common shares outstanding (denominator) 55,949 55,313 55,984

Basic earnings (loss) per common share:

Net Income (loss) - Basic $ 50,160 $ 8,612 $ ( 68,463 )

Weighted shares outstanding - Basic 56,498 55,744 55,313

Basic earnings (loss) per common share $ 0.89 $ 0.15 $ ( 1.24 )

Diluted earnings (loss) per common share:

Net Income (loss) - Basic $ 50,160 $ 8,612 $ ( 68,463 )

Convertible Notes interest expense, net of tax 7,489 — —

Net Income (loss) - Diluted $ 57,649 $ 8,612 $ ( 68,463 )

Weighted shares outstanding - basic 56,498 55,744 55,313

Effect of dilution from equity-based compensation awards* 678 205 —

Effect of dilution from if-converted Convertible Notes** 25,224 — —

Weighted Shares Outstanding - Diluted 82,400 55,949 55,313

Diluted earnings (loss) per common share $ 0.70 $ 0.15 $ ( 1.24 )

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

Restricted stock*** 1,975 1,233 2,786

* Includes time-based share-based awards and performance-based restricted stock units.

Debt for discussion of the terms and conditions of the potential impact of the 2024 Convertible Notes and 2025 Convertible Notes.

There is no dilutive impact for the Convertible Notes for the periods presented.

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

* Includes time-based share-based awards and performance based awards for which targets for fiscal year tranches have been achieved and vesting is subject only to achievement of service conditions.

** See Note 9:

Debt for conversion price and initial conversion rate of the 2024 Convertible Notes and 2025 Convertible Notes.

*** 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.

As a result of our adoption of ASU 2020-06 on October 1, 2021, the dilutive impact of the Convertible Notes for our calculation of diluted net income per share is considered using the if-converted method.

During the fiscal year ended September 30, 2022, we increased net income by $ 7.5 million, t o arrive at the numerator used to calculate diluted earnings per common share, which represents interest expense recognized on the convertible notes that were subject to this change in methodology.

For periods prior to our October 1, 2021 adoption of ASU 2020-06, we applied the treasury stock method to account for the dilutive impact of the 2024 and 2025 Convertible Notes for diluted earnings per share purposes.

STRATEGIC INVESTMENTS

Cash Converters International Limited

On October 1, 2021, we purchased an additional 13 million shares of Cash Converters International Limited ("Cash Converters") for $ 2.5 million.

This purchase increased our total ownership in Cash Converters to 236,702,991 shares, representing a 37.7 % ownership interest.

Additionally, on October 14, 2021, we received a cash dividend of $ 1.7 million from Cash Converters.

On March 10, 2022, we purchased an additional 5.5 million shares of Cash Converters for $ 1.0 million.

This purchase increased our total ownership in Cash Converters to 242,239,157 shares, representing a 38.6 % ownership interest.

On April 5, 2022, we acquired an additional 13 million shares for $ 2.5 million, bringing our total ownership to 255,239,157 shares, representing an ownership interest of 40.7 %.

Additionally, on April 14, 2022, we received a cash dividend of $ 1.7 million from Cash Converters.

On September 15, 2022, we acquired an additional 5.7 million shares for $ 0.9 million, bringing our total ownership to 260,939,157 shares, representing an ownership interest of 41.6 %.

As of September 30, 2022, we owned 260,939,157 shares, or approximately 41.6 %, of Cash Converters.

We acquired our original investment (representing approximately 30 % of the outstanding shares) in November 2009 and have increased our ownership through the acquisition of additional shares periodically since that time.

In April 2021, we acquired 9,519,277 shares through the Cash Converters Dividend Reinvestment Plan, bringing our total ownership to 35.65 % as indicated above.

Since September 30, 2022, we have acquired an additional 13 million shares, bringing our total ownership as of November 2, 2022 to 273,939,157 shares representing an ownership interest of 43.7 %.

Subsequent Events.

Our equity in Cash Converters’s net income was $ 4.3 million in fiscal 2021, and our equity in net loss was $ 2.1 million and $ 0.1 million in fiscal 2020 and 2019, respectively.

Cash Converters did not declare or pay a dividend in fiscal 2020 or 2019.

Our equity in Cash Converters’s net income was $ 2.9 million and $ 4.3 million in fiscal 2022 and 2021, respectively, and our equity in net loss was $ 2.1 million in fiscal 2020.

Cash Converters did not declare or pay a dividend in fiscal 2020.

Cash Converters’s accumulated undistributed after-tax earnings included in our consolidated retained earnings were $ 15.9 million as of September 30, 2022.

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Net profit (loss) $ 8,099 $ 12,081 $ ( 7,032 )

At September 30, 2021 , the fai r value of our investment in Cash Converters, as estimated by reference to its quoted market price per share, was greater than its carrying value.

For the first and second quarters of fiscal 2019, we determined that our investment was impaired and that such impairment was "other-than-temporary." In reaching this conclusion, we considered all available evidence, including evidence in existence as of September 30, 2018.

Additionally, we noted the following developments subsequent to September 30, 2018:

(i) continued decline in Cash Converters's share price;

and (ii) ongoing uncertainty around the Queensland, Australia class action lawsuit regarding historical lending practices by Cash Converters, for which a settlement agreement was reached subsequent to September 30, 2019.

As a result, we recognized an other-than-temporary impairment loss in Cash Converters of $ 19.8 million ($ 15.3 million, net of taxes) during fiscal 2019.

The fair value of our investment in Cash Converters was $ 6.2 million below its carrying value as of September 30, 2019, which we determined was not other-than temporary primarily as a result of the subsequent settlement of the remaining Queensland, Australia class action lawsuit and recovery of share price.

We will continue to monitor the fair value of our investment in Cash Converters for other-than-temporary impairments in future reporting periods and may record additional impairment charges should the fair value of our investment in Cash Converters decline below its carrying value for an extended period of time.

Fair Value Measurements for the fair value and carrying value of our investment in Cash Converters.

We hold a 13.14 % ownership in "RDC" and recognized a $ 0.4 million, $ 0.3 million and $ 0.2 million net loss for the fiscal years ended 2021, 2020 and 2019 respe ctively.

At September 30, 2022, 2021 and 2020, the fair value of our investment in Cash Converters, as estimated by reference to its quoted market price per share, was greater than its carrying value.

Founders One, LLC

In October 2021, we invested $ 15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders One, LLC (“Founders”), a newly-formed entity with one other member.

Founders used that $ 15.0 million to acquire an equity interest in Simple Management Group, Inc.

(“SMG”), which owns and operates 21 pawn stores principally in the Caribbean region, with plans to build and acquire more stores in that region.

The investment in Founders is a variable interest entity, but because the Company is not the primary beneficiary, we do not consolidate it.

Further, as we are not the appointed manager, we do not have the ability to direct the activities of the investment entity that most significantly impact its economic performance.

Consequently, our investment in Founders is accounted for utilizing the measurement alternative within ASC 321, Investments — Equity Securities.

Our $ 15.0 million carrying value of the investment is

included in “Other investments” in our consolidated balance sheets.

Our maximum exposure for losses in this investment is its contributed investment of $ 15.0 million.

FAIR VALUE MEASUREMENTS

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Investments in unconsolidated affiliates 37,733 40,279 40,279 — —

Other investments 24,220 24,220 — — 24,220

Financial liabilities:

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2025 Convertible Notes 140,643 155,250 — 155,250 —

8.5 % unsecured debt due 2024

872 872 — — 872

Based primarily on the short-term nature of cash and cash equivalents, pawn loans, pawn service charges receivable and other debt, we estimate that their carrying value approximates fair value.

We consider our cash and cash equivalents to be measured using Level 1 inputs and our pawn loans, pawn service charges receivable and other debt to be measured using Level 3 inputs.

Based primarily on the short-term nature of cash and cash equivalents, pawn loans, pawn service charges receivable and other liabilities, we estimate that their carrying value approximates fair value.

We consider our cash and cash equivalents to be measured using Level 1 inputs and our pawn loans, pawn service charges receivable and other liabilities to be measured using Level 3 inputs.

Significant increases or decreases in the underlying assumptions used to value pawn loans, pawn service charges receivable, consumer loans, fees and interest receivable and other debt could significantly increase or decrease these fair value estimates.

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

These inputs consist 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.

These inputs consist 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.

We included no control premium for owning a large percentage of outstanding shares.

We use the equity method of accounting for our 13.14 % ownership in a previously consolidated variable interest entity, RDC, over which we no longer have the power to direct the activities that most significantly affect its economic performance.

We believe its fair value approximates carrying value although such fair value is highly variable and includes significant unobservable inputs.

Of the $ 24.2 million included Other investments in the table above as of September 30, 2022, $ 15.0 million is related to our investment in Founders and $ 6.2 million is related to our investment in RDC.

We believe the investments’ fair value approximated its carrying value although such fair value is highly variable and includes significant unobservable inputs .

We previously used the equity method of accounting for our 14.6 % ownership in RDC.

Effective September 2022, the Company no longer had the ability to exercise significant influence and therefore changed its accounting for this investment from the equity method to the cost method, utilizing the measurement alternative in ASC 321, Investments - Equity Securities .

We measured the fair value of the 2024 and 2025 Convertible Notes using quoted price inputs.

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We evaluate goodwill for impairment annually on September 30 and upon the occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of goodwill may be impaired.

As of September 30, 2021, we assessed qualitative factors and determined that it was not more-likely-than-not that the fair values of our reporting units were less than their carrying values as of the testing date.

As of September 30, 2022, we assessed qualitative and quantitative factors and determined that it was not more-likely-than-not that the fair values of our reporting units were less than their carrying values as of the testing date.

As a result of our assessment, no goodwill impairment charge was recorded during the fiscal year ended September 30, 2022.

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We recorded a goodwill impairment charge of $ 41.3 million in the second quarter of fiscal 2020 as “Impairment of goodwill, intangible and other assets” in our Consolidated Statements of Operations.

No further indicators of goodwill impairment were noted as of September 30, 2020.

We test indefinite-lived intangible assets for impairment by first assessing qualitative factors to determine whether it is necessary to perform a quantitative impairment test.

Based on our assessment of qualitative factors as of September 30, 2021, no impairment charges were recorded related to intangible assets or long-lived asset groups.

As of September 30, 2022, we assessed qualitative and quantitative factors and determined that it was not more-likely-than-not that the fair values of our indefinite-lived intangible assets were less than their carrying values.

Based on our assessment as of September 30, 2022, no impairment charges were recorded related to intangible assets or long-lived asset groups.

In connection with the analysis of goodwill as of March 31, 2020, we determined that the fair values of the trade names associated with acquired entities in our Mexico and GPMX reporting units were also impaired and recorded an impairment charge of $ 2.9 million and $ 1.7 million, respectively.

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These impairment charges were recorded as “ Impairment of goodwill, intangible and other assets ” in our Consolidated Statements of Operations.

No additional indicators of impairment of intangible assets or long-lived asset groups were noted as of September 30, 2020.

The following table presents the changes in the carrying value of goodwill by segment:

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

Measurement period adjustments 176 ( 149 ) 27

Goodwill impairment * ( 10,000 ) ( 31,340 ) ( 41,340 )

Acquisitions 2,543 26,100 28,643

Effect of foreign currency translation changes — ( 467 ) ( 467 )

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Acquisitions 1,032 — 1,032

Measurement period adjustments — ( 678 ) ( 678 )

Effect of foreign currency translation changes — 716 716

Balances as of September 30, 2022 $ 245,503 $ 41,325 $ 286,828

* Represents cumulative goodwill impairment.

The following table presents the balance of each major class of intangible assets:

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$ 28,546 $ 31,885

Non-compete agreements $ 3,502 $ 3,417

Accumulated amortization ( 3,502 ) ( 3,394 )

Other $ 2,344 $ 4,452

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These amounts were $ 11.7 million, $ 11.3 million and $ 11.2 million for fiscal 2022, 2021 and 2020, respectively.

A charge of $ 2.4 million was recorded in fourth quarter of fiscal 2022 to "”General and administrative” expenses in our Consolidated Statements of Operations related to an asset write-down associated with an information technology software infrastructure migration.

As of September 30, 2022, our estimate of future amortization expense for definite-lived intangible assets is as follows (in thousands):

2023 $ 10,275

2027 and thereafter $ 3,815

As acquisitions and dispositions occur in the future, amortization expense may vary from these estimates.

The Company adopted ASU 2020-06 on October 1, 2021.

Organization And Summary Of Significant Accounting Policies for further discussion of this recently adopted accounting policy.

The following tables present our debt instruments outstanding, contractual maturities and interest expense:

September 30, 2022 September 30, 2021

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

(in thousands) Gross Amount Debt Issuance Costs Carrying

Amount Gross Amount Debt Discount and Issuance Costs Carrying

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2025 Convertible Notes 172,500 ( 2,172 ) 170,328 172,500 ( 31,857 ) 140,643

8.5 % unsecured debt due 2024*

— — — 872 — 872

Total $ 316,250 $ ( 52,064 ) $ 264,186 $ 317,122 $ ( 65,893 ) $ 251,229

Less current portion — — — 213 — 213

Total long-term debt $ 316,250 $ ( 3,347 ) $ 312,903 $ 316,250 $ ( 52,064 ) $ 264,186

* Amounts translated from Guatemalan quetzales as of the applicable period end.

Schedule of Contractual Maturities

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Total $ 316,250 $ — $ 316,250 $ —

* Excludes the potential impact of embedded derivatives.

Fiscal Year Ended September 30,

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Contractual interest expense $ 4,133 $ 4,133 $ 4,133

Amortization of debt discount and deferred financing costs — — 7,556

Total interest expense $ — $ — $ 10,630

2024 Convertible Notes:

Contractual interest expense $ 4,133 $ 4,133 $ 4,133

Amortization of debt discount and deferred financing costs 6,349 5,883 5,452

Amortization of deferred financing costs 635 446 446

Amortization of debt discount — 5,903 5,437

Total interest expense $ 4,768 $ 10,482 $ 10,016

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Contractual interest expense $ 4,097 $ 4,097 $ 4,097

Amortization of debt discount and deferred financing costs 7,479 6,954 6,468

Amortization of deferred financing costs 797 560 561

Amortization of debt discount — 6,919 6,393

Total interest expense $ 4,894 $ 11,576 $ 11,051

2.875 % Convertible Senior Notes Due 2024

In May 2018, we issued $ 172.5 million aggregate principal amount of 2.375 % Convertible Senior Notes Due 2025 (the “2025 Convertible Notes”).

All of the 2025 Convertible Notes were issued pursuant to an indenture dated May 14, 2018 (the "2018 Indenture") by and between us and Wells Fargo Bank, National Association, as the trustee.

Effective October 1, 2019, Branch Banking and Trust Company (“BB&T”), a North Carolina Bank, has assumed the duties and responsibilities as trustee under the 2018 Indenture.

The 2025 Convertible Notes were issued in a private offering and resold under Rule 144A under the Securities Act of 1933.

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 will mature on May 1, 2025 (the "2025 Maturity Date"), unless converted, redeemed or repurchased in accordance with their terms prior to such date.

At maturity, the holders of the 2025 Convertible Notes will be entitled to receive cash equal to the principal amount of the 2025 Convertible Notes plus unpaid accrued interest.

The 2025 Convertible Notes are convertible based on an initial conversion rate of 62.8931 shares of Class A Non-Voting Common Stock (“Class A Common Stock”) per $1,000 principal amount (equivalent to an initial conversion price of $ 15.90 per share).

In July 2017, we issued $ 143.75 million aggregate principal amount of 2.875 % Convertible Senior Notes Due 2024 (the “2024 Convertible Notes”).

The 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the "2017 Indenture") by and between the Company and Wells Fargo Bank, National Association, as the original trustee.

Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2017 Indenture.

The 2024 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933.

The 2024 Convertible Notes pay interest semi-annually in arrears at a rate of 2.875 % per annum on January 1 and July 1 of each year, commencing January 1, 2018, and mature on July 1, 2024 (the "2024 Maturity Date"), unless converted, redeemed or repurchased in accordance with the terms prior to such date.

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 effective interest rate for fiscal 2022 was approximately 3.35 %.

As of September 30, 2022, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2024 Maturity Date assuming no early conversion.

The 2024 Convertible Notes are convertible based on an initial conversion rate of 100 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $ 10.00 per share).

The conversion rate will not be adjusted for any accrued and unpaid interest.

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Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election.

We account for the Class A Common Stock issuable upon conversion under the treasury stock method.

If our average share price is over $ 15.90 per share for any fiscal quarter, we are required to recognize incremental dilution of our earnings per share.

Prior to November 1, 2024, the 2025 Convertible Notes are convertible only under the following circumstances:

(1) during any fiscal quarter commencing after the fiscal quarter ended on June 30, 2018 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

Prior to January 1, 2024, the 2024 Convertible Notes will be convertible only under the following circumstances:

(1) during any fiscal quarter commencing after the fiscal quarter ending on September 30, 2017 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

(2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2017 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day;

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or (4) upon the occurrence of specified corporate events, as defined in the 2017 Indenture.

On or after November 1, 2024 until the close of business on the business day immediately preceding the 2025 Maturity Date, holders of 2025 Convertible Notes may, at their option, convert their 2025 Convertible Notes at any time, regardless of the foregoing circumstances.

We may not redeem the 2025 Convertible Notes prior to May 1, 2022.

conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption.

On or after January 1, 2024 until the close of business on the business day immediately preceding the 2024 Maturity Date, holders of 2024 Convertible Notes may, at their option, convert their 2024 Convertible Notes at any time, regardless of the foregoing circumstances.

At our option, we may redeem for cash all or any portion of the 2024 Convertible Notes on or after July 6, 2021, if the last reported sale price of the Class A Common Stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption.

The redemption price will be equal to 100 % of the principal amount of the 2024 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

We measured the fair value of the liability component of the 2025 Convertible Notes under a discounted cash flow approach considering our synthetic credit rating, as determined with external consultation, including inputs that are not observable in the market.

The fair value of the liability component was estimated by calculating the present value of the cash flows using a discoun t rate of 8 % for a similarly stru ctured liability with no conversion feature, maturing in seven years .

Our estimate resulted in an initial carrying value of the liability component of the 2025 Convertible Notes of $ 121.3 million with an associated original issue discount of $ 51.2 million, exclusive of deferred financing costs, accreted to the face value of the 2025 Convertible Notes based on the effective interest method through the 2025 Maturity Date.

We accounted for the conversion feature of the 2025 Convertible Notes as a separate equity-classified instrument (“2025 Convertible Notes Embedded Derivative”).

The carrying amount of the 2025 Convertible Notes conversion feature (the “2025 Convertible Notes Embedded Derivative”) is currently included under “Additional paid-in capital” in our Consolidated Balance Sheets of September 30, 2021 and was initially calculated as $ 49.6 million ($ 39.1 million, net of tax).

We incurred transaction costs of $ 5.5 million related to the issuance of the 2025 Convertible Notes, which we recorded as deferred financing costs and are included under “Long-term debt, net” and “Additional paid-in capital” in our Consolidated Balance Sheets.

The effective interest rate for fiscal 2021 was appro ximately 9 %.

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

As of September 30, 2022, the 2024 Convertible Notes were not convertible as no conditions of conversion had been met.

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If none of the conversion conditions have been met in a future fiscal quarter prior to the one-year period immediately preceding the 2024 Maturity Date, we will classify our net liability under the 2024 Convertible Notes as a non-current liability in the Consolidated Balance Sheets as of the end of that fiscal quarter.

If the note holders elect to convert their 2025 Convertible Notes prior to maturity, any unamortized discount and transaction costs will be recognized as expense at the time of conversion.

If the entire outstanding principal amount had been converted on September 30, 2021, we would have recorded an expense associated with the conversion, comprised of $ 31.9 million of unamortized debt discount and issuance costs.

If the note holders elect to convert their 2024 Convertible Notes prior to maturity, any unamortized debt issuance costs will be recognized as expense at the time of conversion.

If the entire outstanding principal amount had been converted on September 30, 2022, we would have recorded an expense associated with the conversion, comprised of $ 1.2 million of unamortized debt issuance costs.

As of September 30, 2022, none of the note holders had elected to convert their 2024 Convertible Notes.

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2.375 % 2025 Convertible Senior Notes Due 2025

In July 2017, we issued $ 143.75 million aggregate principal amount of 2.875 % Convertible Senior Notes Due 2024 (the “2024 Convertible Notes”).

All of the 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the “2017 Indenture”) by and between us and Wells Fargo Bank, National Association, as the trustee.

Effective October 1, 2019, BB&T has assumed the duties and responsibilities as trustee under the 2017 Indenture.

The 2024 Convertible Notes were issued in a private offering and resold under Rule 144A under the Securities Act of 1933.

The 2024 Convertible Notes pay interest semi-annually in arrears at a rate of 2.875 % per annum on January 1 and July 1 of each year, commencing January 1, 2018, and will mature on July 1, 2024 (the “2024 Maturity Date”), unless converted, redeemed or repurchased in accordance with their terms prior to such date.

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

In May 2018, we issued $ 172.5 million aggregate principal amount of 2.375 % Convertible Senior Notes Due 2025 (the “2025 Convertible Notes”).

The 2025 Convertible Notes were issued pursuant to an indenture dated May 14, 2018 (the "2018 Indenture") by and between the Company and Wells Fargo Bank, National Association, as the original trustee.

Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2018 Indenture.

The 2025 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933.

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 effective interest rate for fiscal 2022 was approximately 2.88 %.

As of September 30, 2022, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2025 Maturity Date assuming no early conversion.

The 2025 Convertible Notes are convertible based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $ 15.90 per share).

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Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election.

We account for the Class A Common Stock issuable upon conversion under the treasury stock method.

If our share price increases over $ 10.00 per share, we are required to recognize incremental dilution of our earnings per share.

Prior to January 1, 2024, the 2024 Convertible Notes will be convertible only under the following circumstances:

the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

Prior to November 1, 2024, the 2025 Convertible Notes are convertible only under the following circumstances:

(2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2018 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day;

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or (4) upon the occurrence of specified corporate events, as defined in the 2018 Indenture.

We may not redeem the 2024 Convertible Notes prior to July 6, 2021.

On or after November 1,

2024 until the close of business on the business day immediately preceding the 2025 Maturity Date, holders of 2025 Convertible Notes may, at their option, convert their 2025 Convertible Notes at any time, regardless of the foregoing circumstances.

At our option, we may redeem for cash all or any portion of the 2025 Convertible Notes on or after May 1, 2022, if the last reported sale price of the Class A Common Stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption.

The redemption price will be equal to 100 % of the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

We measured the fair value of the liability component of the 2024 Convertible Notes under a discounted cash flow approach considering our synthetic credit rating, as determined with external consultation, including inputs that are not observable in the market.

The fair value of the liability component was estimated by calculating the present value of the cash flows using discount rates slightly above 8 % for a similarly structured liability with no conversion feature, maturing in seven years .

Our estimate resulted in an initial carrying value of the liability component of the 2024 Convertible Notes of $ 102.7 million with an associated original issue discount of $ 41.0 million, exclusive of deferred financing costs, accreted to the face value of the 2024 Convertible Notes based on the effective interest method through the 2024 Maturity Date.

We accounted for the conversion feature of the 2024 Convertible Notes as a separate equity-classified instrument (the “2024 Convertible Notes Embedded Derivative”), initially recorded as $ 39.8 million ($ 25.3 million, net of tax), inclusive of deferred financing costs, on the issuance date and included under “Additional paid-in capital” in our Consolidated Balance Sheets, including an allocated portion of the deferred financing costs.The carrying amount of the 2024 Convertible Notes Embedded Derivative included under “Additional paid-in capital” in our Consolidated Balance Sheets of September 30, 2021 was $ 25.3 million.

We incurred transaction costs of $ 4.2 million related to the issuance of the 2024 Convertible Notes, which we recorded as deferred financing costs and are included under “Long-term debt, net” and “Additional paid-in capital” in our Consolidated Balance Sheets .

Deferred financing costs recorded under “Long-term debt, net” are being amortized to interest expense over the expected term of the 2024 Convertible Notes.

The effective interest rate for fiscal 2021 was approximately 9 %.

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

As of September 30, 2022, the 2025 Convertible Notes were not convertible as no conditions of conversion had been met.

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If none of the conversion conditions have been met in a future fiscal quarter prior to the one-year period immediately preceding the 2025 Maturity Date, we will classify our net liability under the 2025 Convertible Notes as a non-current liability in the Consolidated Balance Sheets as of the end of that fiscal quarter.

If the note holders elect to convert their 2024 Convertible Notes prior to maturity, any unamortized discount and transaction costs will be recognized as expense at the time of conversion.

If the entire outstanding principal amount had been converted on September 30, 2021, we would have recorded an expense associated with the conversion, comprised of $ 20.2 million of unamortized debt discount and issuance costs.

If the note holders elect to convert their 2025 Convertible Notes prior to maturity, any unamortized debt issuance costs will be recognized as expense at the time of conversion.

If the entire outstanding principal amount had been converted on September 30, 2022, we would have recorded an expense associated with the conversion, comprised of $ 2.2 million of unamortized debt issuance costs.

As of September 30, 2022, none of the note holders had elected to convert their 2025 Convertible Notes.

As of September 30, 2022, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount.

2.125 % Cash Convertible Senior Notes Due 2019

In June 2014, we issued $ 200 million aggregate principal amount of 2.125 % Cash Convertible Senior Notes Due 2019 (the “2019 Convertible Notes”), with an additional $ 30 million principal amount being issued in July 2014.

In July 2017, we used $ 34.4 million of net proceeds from the 2024 Convertible Notes offering to repurchase and retire $ 35.0 million aggregate principal amount of 2019 Convertible Notes.

The 2019 Convertible Notes paid interest semi-annually in arrears at a rate of 2.125 % per annum on June 15 and December 15 of each year.

The 2019 Convertible Notes matured on June 15, 2019 (the "2019 Maturity Date") , and the remaining $ 195.0 million aggregate principal amount outstanding plus accrued interest was repaid using cash on hand.

2019 Convertible Notes Warrants

In connection with the issuance of the 2019 Convertible Notes, we also sold net-share-settled warrants (the “2019 Convertible Notes Warrants”).

The 2019 Convertible Notes Warrants allowed for the purchase of up to approximately 14.3 million shares of our Class A Common Stock at a strike price of $ 20.83 per share.

We accounted for the Class A Common Stock issuable upon exercise under the treasury stock method.

The 2019 Convertible Notes Warrants began to expire on a daily basis after we repaid the 2019 Convertible Notes and the last of the unexpired 2019 Convertible Notes Warrants expired in May 2020.

As of September 30, 2020, there were no 2019 Convertible Notes Warrants outstanding, and no shares of Class A Common Stock were ever issued pursuant to the 2019 Convertible Notes Warrants.

CASHMAX Secured Borrowing Facility

In November 2018, we entered into a receivable's securitization facility with a third-party lender to provide funding for installment loan originations in our Canadian CASHMAX business.

We terminated this facility in September 2020 as part of the closure of the operations of our CASHMAX business.

COMMON STOCK AND STOCK COMPENSATION

Common Stock Repurchase Program

In December 2019, our Board of Directors (the "Board") authorized the repurchase of up to $ 60.0 million of our Class A Common Stock over three years .

Repurchases under the program were suspended in March 2020 in order to preserve liquidity as a result of uncertainties regarding the COVID-19 pandemic, and no share repurchases under the program have been executed since then.

Through March 2020, we repurchased and retired 943,149 shares of our Class A Common Stock for $ 5.2 million, which amount was allocated between "Additional paid-in capital" and "Retained earnings" in our Consolidated Balance Sheets.

On May 3, 2022, the Company's Board of Directors (the "Board") authorized the repurchase of up to $ 50 million of our Class A Common Stock over three years .

Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities.

The amount and timing of purchases will be dependent on a variety of factors, including stock price, trading volume, general market conditions, legal and regulatory requirements, general business conditions, the level of cash flows, and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities.

The Board of Directors has reserved the right to modify, suspend or terminate the program at any time.

Through September 30, 2022, the Company has repurchased and retired 237,943 shares of our Class A Common Stock for $ 2.0 million, which amount was allocated between "Additional paid-in capital" and "Retained earnings" in our Consolidated Balance Sheets.

Stock Compensation

Our Long-Term Incentive Plan (the “LTI Plan”) permits grants of options, restricted stock awards and stock appreciation rights covering up to 5,485,649 shares of our Class A Common Stock plus any shares that become available for issuance under either the LTI Plan or prior plans as a result of forfeitures or cancellations of awards without delivery of shares or as a result of withholding shares to satisfy tax withholding obligations.

The purpose of the LTI Plan is to retain the services of valued employees and directors and to incentivize such persons to make contributions to our company and motivate excellent performance.

Under the LTI Plan, we grant awards of restricted stock or restricted stock units to employees and non-employee directors.

Awards granted to employees are typically subject to performance and service conditions.

Awards granted to non-employee directors are time-based awards subject only to service conditions.

Awards are measured at the grant date fair value with compensation costs associated with the awards recognized over the requisite service period, usually the vesting period, on a straight-line basis.

The Company utilizes equity-based awards as a long-term incentive to attract and retain qualified employees, consultants and directors and motivate them to achieve long-term goals, thereby promoting the long-term financial interests of the Company and enhancing long-term stockholder return.

2022 LTI Plan

On March 1, 2022, the Company adopted the 2022 Long-Term Incentive Plan (the “2022 LTI Plan”), which gives the Company the ability to grant equity-based incentive compensation awards, in the form of restricted stock or restricted stock units, to its employees, members of the Board of Directors and consultants, independent contractors or advisors who are determined to have a direct and significant effect on the Company’s performance.

The total number of shares of Class A Non-Voting Common Stock that may be issued pursuant to awards under the 2022 LTI Plan (“Authorized Shares”) is such number that is from time to time approved by the holder of the Company’s Class B Voting Common Stock (the “Voting Stockholder”).

At the time the 2022 LTI Plan was adopted, 400,000 shares of our Class A Non-Voting Common Stock were added as Authorized Shares, and that number was increased to 1,900,000 in October 2022.

At any time, the number of shares that are available for issuance under future awards (“Available Shares”) is equal to the number of Authorized Shares reduced by the number of shares previous issued and the number of shares that may be issued under outstanding awards.

The number of Available Shares is increased for shares covered by awards that are forfeited, cancelled or otherwise terminated without the issuance of shares or shares that are withheld at the request of a participant to satisfy such participant’s tax withholding obligations.

The 2022 LTI Plan is administered by the People and Compensation Committee of the Board of Directors (the “Committee”).

The Committee generally determines and recommends the type, recipient, amount and terms for all awards issued under the 2022 LTI Plan, but each award issuance requires the approval of the full Board of Directors.

Restricted stock awards are generally subject to continued service over a specified period (typically one -to- three years ) and expensed straight-line over the service period.

Restricted stock units are generally subject to the achievement of performance goals in addition to continued service, and they are expensed, on a tranche-by-tranche basis, ratably over the service period beginning with the start of the measurement of performance.

2010 LTI Plan

The 2022 LTI Plan replaced the 2010 Long-Term Incentive Plan (the “2010 LTI Plan”) for all long-term incentive awards issued from and after January 1, 2022.

The 2010 LTI Plan remains effective, but only with respect to LTI awards issued and outstanding as of December 31, 2021, and any authorized but unissued shares remaining in the 2010 LTI Plan are available only to satisfy such awards.

Under the 2010 LTI Plan, we granted awards of restricted stock or restricted stock units to employees and non-employee directors.

Awards granted to employees were typically subject to performance and service conditions.

Awards granted to non-employee directors were time-based awards subject only to service conditions.

Awards were measured at the grant date fair value with compensation costs associated with the awards recognized over the requisite service period, usually the vesting period, on a straight-line basis.

Board of Director Awards

In February 2021, we granted 127,744 shares of restricted stock to the non-employee directors who were elected to serve one-year terms at the 2021 Annual Meeting of Stockholders.

Those shares are scheduled to vest at the 2022 Annual Meeting of Stockholders (but in no event later than March 31, 2022), subject only to service conditions.

In December 2020, we granted 143,145 shares of restricted stock to the non-employee directors serving at that time.

Immediately after our 2022 Annual Meeting of Stockholders in March 2022, we granted each of the five non-employee directors a restricted stock award covering 26,490 shares ( 132,450 shares in total).

Those shares are scheduled to vest on the day immediately preceding the 2023 Annual Meeting of Stockholders (but in no event later than March 31, 2023), subject only to service conditions.

In February 2021, we granted each of the four non-employee directors serving at that time a restricted stock award covering 31,936 shares ( 127,744 shares in total).

Those shares vested on the day immediately preceding our 2022 Annual Meeting of Stockholders in March 2022.

In December 2020, we granted each of the nine non-employee directors serving at that time a restricted stock award covering 15,905 shares ( 143,145 shares in total).

Those shares were scheduled to vest on March 31, 2021, subject only to service conditions.

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The remaining 63,620 shares vested on March 31, 2021.

In May 2020, we granted 12,346 shares of restricted stock to a newly-elected non-employee director, and in November 2019, we granted 222,912 shares of restricted stock to the non-employee directors serving at that time.

In May 2020, we granted 12,346 shares of restricted stock to a newly-appointed non-employee director, and in December 2019, we granted each of the nine non-employee directors serving at that time a restricted stock award covering 24,768 shares ( 222,912 shares in total).

The vesting of these shares was subject only to service conditions, and all of such shares vested on September 30, 2020.

In May 2019 and April 2019, we granted a total of 60,088 shares of restricted stock to our seven newly-elected non-employee directors, and in November 2018, we granted 59,812 shares of restricted stock to our non-employee directors serving at that time.

The vesting of these shares was subject only to service conditions, and all of the shares vested on September 30, 2019.

Employee Awards

All LTI Plan awards are reviewed and approved by the People and Compensation Committee of the Board of Directors (the “Committee”).

FY21 Awards — In February 2021, we granted 1,177,214 shares of restricted stock to employees.

FY22 Awards — In October and November 2021, we granted restricted stock unit awards covering a total of 981,327 shares to our executive officers and other key employees.

These awards were issued as part of our annual LTI program for fiscal 2022.

The awards have a three-year performance period consisting of fiscal 2022, fiscal 2023 and fiscal 2024.

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The number of shares available to vest from each tranche can range from 0 to 150 % and is dependent on the achievement of the performance condition for that tranche.

All of the shares that become available to vest based on the achievement of the performance conditions will vest on September 30, 2023, subject to continuous, active employment with the Company through that date.

Performance targets for the fiscal 2021 tranche were determined and communicated in February 2021.

All of the shares that become available to vest based on the achievement of the performance conditions will vest on September 30, 2024, so long as the recipient continues active employment with the Company through that date.

Performance targets for the fiscal 2022 tranche were determined and communicated at the time of grant.

Grant dates for the other two tranches will be determined when the applicable performance targets are established for these tranches.

As of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probable of achievement at the 150 % level.

In August 2021, we granted an additional 4,722 shares of restricted stock to employees under similar terms as those granted in February 2021.

FY20 Awards — In January 2020, the Committee approved restricted stock awards for employees but did not finalize the performance targets at that time.

In November 2020, the Committee approved the applicable performance targets and we granted 550,224 shares of restricted stock to employees.

During fiscal 2022, we granted restricted stock unit awards covering an additional 161,265 shares to executive officers and other key employees in connection with promotions or new hires.

These additional awards carry the same terms as those granted in October and November 2021.

In October 2021, we granted a restricted stock award covering 29,722 to an executive officer as a special performance and retention award.

This awards vests ratably over three years (fiscal 2022, fiscal 2023 and fiscal 2024), subject only to continued service.

FY21 Awards — In February 2021, we granted restricted stock units covering a total of 1,177,214 shares to our executive officers and other key employees.

The awards have a three-year performance period consisting of fiscal 2021, fiscal 2022 and fiscal 2023.

For each award, the total number of shares was allocated equally among the three fiscal years in the performance period, with each tranche having separate performance conditions.

The number of shares available to vest from each tranche can range from 0 to 150 % and is dependent on the achievement of the performance condition for that tranche.

All of the shares that become available to vest based on the achievement of the performance conditions will vest on September 30, 2023, so long as the recipient continues active employment with the Company through

Performance targets for the fiscal 2021 tranche were determined and communicated in February 2021, and performance targets for the fiscal 2022 tranche were determined and communicated in October 2021.

The grant date for the fiscal 2023 tranche will be determined when the applicable performance targets are established for that tranche.

As of September 30, 2021, we considered the performance targets for the fiscal 2021 tranche to be probable of achievement at the 150 % level, and as of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probable of achievement at the 150 % level.

During fiscal 2021, we granted restricted stock unit awards covering an additional 4,722 shares of restricted stock to employees in connection with promotions or new hires.

These additional awards carry the same terms as those granted in February 2021.

FY20 Awards — In January 2020, the Committee approved restricted stock unit awards for executive officers and key employees, but did not finalize the performance targets at that time.

In January 2021, the Committee approved the applicable performance targets and we granted restricted stock unit awards covering a total of 550,224 shares of restricted stock to employees.

We consider the awards to have a three-year performance period consisting of fiscal 2020, fiscal 2021 and fiscal 2022, with a service condition applicable to fiscal 2020 and then separate performance conditions applicable to fiscal 2021 and 2022.

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The number of shares available to vest from each tranche is dependent on the achievement of the performance condition for that tranche and can range from 0 to 100 %.

All of the shares that become available to vest based on the achievement of the performance conditions will vest on September 30, 2022, subject to continuous, active employment with the Company through that date.

Performance targets for the fiscal 2021 tranche were communicated in January 2021.

Grant dates for the fiscal 2022 tranche will be determined when performance targets are established for that tranche.

As of September 30, 2021, we considered the performance targets for the fiscal 2021 tranche to be probable of achievement at the 100 % level.

FY19 Awards — In July 2019 and November 2018, we granted 61,138 shares of restricted stock and 971,615 shares of restricted stock, respectively, to employees.

All of the shares that become available to vest based on the achievement of the performance conditions will vest on September 30, 2022, so long as the recipient continues active employment with the Company through that date.

Performance targets for the fiscal 2021 tranche were communicated in January 2021, and performance targets for the fiscal 2022 tranche were determined and communicated in October 2021.

As of September 30, 2021, we considered the performance targets for the fiscal 2021 tranche to be probable of achievement at the 100 % level, and as of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probably of achievement at the 100 % level.

FY19 Awards — In December 2018, we granted restricted stock unit awards covering a total of 971,615 shares to executive officers and other key employees.

The awards had a three-year performance period consisting of fiscal 2019, fiscal 2020 and fiscal 2021, and were subject to a single three-year performance condition as well as a service condition through the end of the performance period.

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We treated this modification as a cancellation of the existing awards and the grant of new awards subject to a new performance condition, which resulted in (1) the cancellation of awards covering 458,960 shares and the reversal of $ 2.9 million of previously recognized stock compensation expense and (2) the grant of 358,883 shares of restricted stock.

These awards are scheduled to vest on September 30, 2021, subject to the achievement of the specified performance target, which will be determined in November 2021.

As of September 30, 2021, we considered that performance target to be probable of achievement.

FY18 Awards — In December 2017, we granted 1,308,533 shares of restricted stock to employees.

During fiscal 2021, we granted restricted stock unit awards covering an additional 61,138 shares of restricted stock to employees in connection with promotions or new hires.

These additional awards carried the same terms as those granted in December 2018.

All of these awards vested in November 2021, after the Committee determined that the performance condition had been met.

FY18 Awards — In December 2017, we granted restricted stock unit awards covering a total of 1,308,533 shares to executive officers and other key employees.

The awards had a three-year performance period consisting of fiscal 2018, fiscal 2019 and fiscal 2020, and were subject to a single three-year performance condition as well as a service condition through the end of the performance period.

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Awards covering 81,896 shares were cancelled, resulting in a reversal of $ 0.8 million of previously recognized stock compensation expense.

FY17 Awards — In November and December 2016 and April 2017, we granted 931,260 shares of restricted stock to employees.

The awards had a three-year performance period consisting of fiscal 2017, fiscal 2018 and fiscal 2019, and were subject to a single three-year performance condition as well as a service condition through the end of the performance period.

Following the end of fiscal 2019, the Committee determined that the applicable performance target had been achieved, and the awards that remained outstanding at that time (covering 463,467 shares) vested.

As of September 30, 2021, the unamortized fair value, exclusive of forfeitures, of share awards to be amortized over their remaining vesting periods was approximately $ 1.2 million.

As of September 30, 2022, the unamortized fair value of share awards to be amortized over their remaining vesting periods was approximately $ 10.0 million.

The weighted-average period over which these costs will be amortized is approximately two years .

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Any future determination to pay cash dividends will be at the discretion of our Board of Directors.

The following table presents the components of our income from continuing operations before income taxes, including inter-segment amounts:

The following table presents the components of our income before income taxes, including inter-segment amounts:

Fiscal Year Ended September 30,

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Non-deductible items 1,705 2,087 772

Tax credits — — ( 551 )

Foreign rate differential 1,306 1,111 ( 1,671 )

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Net deferred tax asset $ 11,772 $ 6,062

As of September 30, 2021, we had federal and state net operating loss carryforwards of approximately $ 100.6 million, which begin to expire in 2022 if not utilized.

As of September 30, 2022, we had state net operating loss carryforwards of approximately $ 90.5 million, which begin to expire in 2023 if not utilized.

We also had foreign net operating loss carryforwards of $ 51.3 million, which will begin to expire in 2030 if not utilized.

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Our valuation allowance has been established to offset certain state and foreign net operating loss carryforwards and foreign tax credit carryforwards that are not more likely than not to be utilized prior to expiration.

The valuation allowance increased by $ 0.6 million in fiscal 2021, primarily due to the recording of a valuation allowance for losses generated during the year in certain foreign jurisdictions which we believe are not more likely than not to be utilized.

The valuation allowance decreased by $ 1.2 million in fiscal 2022, primarily due to the expiration of the statute of limitations on certain state NOL’s for which a valuation allowance had been recorded as well as a reduction of fully reserved net operating loss carryforward and other deferred tax assets in Canada .

We believe our results from future operations will generate sufficient taxable income in the appropriate jurisdictions such that it is more likely than not that the remaining deferred tax assets will be realized.

Deferred taxes are not provided for undistributed earnings of foreign subsidiaries of approximately $ 72.5 million which are intended to be reinvested outside of the U.S.

Accordingly, no provision for foreign withholding taxes associated with a distribution of those earnings has been made.

Accordingly, no provision for foreign withholding taxes associated with a distribution of those earnings has

We estimate that, upon distribution of our share of these earnings, we would be subject to withholding taxes of approximately $ 3.7 million as of September 30, 2022.

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The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense.

During 2021, 2020, and 2019, the Company recognized income tax expense consisting of interest and penalties of $ 0.3 million, $ 1.2 million, and $ 0.2 million, respectively, due to the accrual of current year interest and penalties on existing positions offset by the reversal of previous accruals due to the lapse of the statute of limitations.

During 2022, the Company recognized income tax expense of $ 0.2 million offset by the reversal of previously accrued interest and penalties of $ 1.0 million due to the lapse of the statue of limitations on the associated tax position and an income tax expense of $ 0.3 million and $ 1.2 million, during 2021 and 2020 respectively, due to the accrual of interest and penalties.

The total amount of accrued interest and penalties was $ 1.0 million, $ 1.8 million and $ 1.5 million in 2022, 2021 and 2020, respectively.

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We believe that adequate provisions have been made for any adjustments that may result from tax examinations.

The weighted-average remaining lease term for operating leases as of September 30, 2021 was 5.08 years, which includes options to extend when it is reasonably certain that we will exercise the option.

We used incremental borrowing rates that match the duration of the remaining lease terms of our operating leases on a fully collateralized basis upon adoption as of October 1, 2019 to initially measure our lease liability.

The weighted average incremental borrowing rate used to measure the lease liability as of September 30, 2021 was 5.92 %.

The details of our right-of-use asset and lease liability recognized upon adoption of ASC 842 was computed based on the consumer price index and foreign currency exchange rate as applicable then in effect and excluding executory costs on October 1, 2019, were as follows (in thousands):

Right-of-use asset $ 246,028

Straight-line rent accrual ( 8,479 )

Net right-of-use asset $ 237,549

Lease liability, current $ 45,272

Lease liability, non-current 200,756

Total lease liability $ 246,028

The table below presents balances of our operating leases:

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

Right-of-use asset $ 200,990 $ 183,809

Lease liability, current $ 52,263 $ 49,742

Lease liability, non-current 161,330 153,040

Total lease liability $ 213,593 $ 202,782

The table below provides the composition of our lease costs:

The table below presents balances of our lease assets and liabilities and there balance sheet locations for both operating and financing leases:

(in thousands) Balance Sheet Location September 30, 2022 September 30, 2021

Lease assets:

Operating lease right-of-use assets Right-of-use assets, net $ 221,405 $ 200,990

Financing lease assets Right-of-use assets, net 181 —

Total lease assets $ 221,586 $ 200,990

Lease liabilities:

Operating lease liabilities Operating lease liabilities, current $ 52,334 $ 52,263

Financing lease liabilities Accounts payable, accrued expenses and other current liabilities 37 —

Total current lease liabilities 52,371 52,263

Operating Lease liabilities Operating lease liabilities 180,756 161,330

Financing lease liabilities Other long-term liabilities 148 —

Total non-current lease liabilities 180,904 161,330

Total lease liabilities $ 233,275 $ 213,593

The table below provides major components of our lease costs:

Fiscal Year Ended September 30,

(in thousands) 2022 2021

Operating lease expense $ 61,980 $ 62,925

Variable lease expense 13,000 11,846

Total lease expense $ 74,980 $ 74,771

Operating lease cost:

Operating lease cost * $ 67,414 $ 61,980

Variable lease cost 15,229 13,000

Total operating lease cost 82,643 $ 74,980

Financing lease cost:

Amortization of financing lease assets 3 —

Interest on financing lease liabilities 1 —

Total financing lease cost 4 —

Total lease cost $ 82,647 $ 74,980

* Includes a reduction for sublease rental income of $ 3.6 million and $ 3.4 million for fiscal years ending September 2022 and 2021, respectively.

Lease expense is recognized on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred.

The components of lease expense are included in “Store expenses” and “General and administrative” expense, based on the underlying lease use.

Cash paid for operating leases are $ 72.3 million and $ 61.9 million for the fiscal years ended September 30, 2022 and 2021, respectively.

The weighted- average term and discount rates for leases are as follows:

Fiscal Year Ended September 30,

Weighted-average remaining lease term (years):

Operating leases 5.12 5.08

Financing leases 4.10 —

Weighted-average discount rate:

Operating leases 8.32 % 5.92 %

Financing leases 11.14 % — %

As of September 30, 2022, maturities of lease liabilities under ASC 842 by fiscal year were as follows (in thousands):

Operating Leases Financing Leases

$ 69,106 $ 63

Thereafter 40,681 —

Total lease liabilities 286,173 235

portion representing interest 46,706

portion representing Imputed interest 53,083 50

Total net lease liabilities 233,090 185

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Sublease payments are expected to offset substantially all of our original operating lease obligations over the nine-year period beginning March 2015 and ending September 2024.

The following table presents the amount of net rent recognized as expense under ASC Topic 840 — Leases (in thousands):

Fiscal Year Ended September 30,

Gross rent expense from continuing operations $ 65,295

Sublease rent revenue from continuing operations ( 35 )

Net rent expense from continuing operations $ 65,260

During the fourth quarter of fiscal 2022, the Miami office lease and sublease were terminated with no fees, and the deposit to the subtenant was returned.

As a result of the COVID-19 pandemic, we believe there was a significant adverse change in the business climate that impacted the office leasing market and a significant decrease in the market prices of an asset or asset group that affected the value of the right of use asset for our corporate office.

We determined the undiscounted cash flows of the subleases did not exceed the net book value of the right of use asset.

We then determined the discounted cash flows of the subleases did not exceed the book value of the right of use asset, and an impairment

charge of $ 5.0 million was recorded in the fourth quarter of fiscal 2020 and is recorded under “Impairment of goodwill, intangible and other assets” in the Consolidated Statements of Operations.

No such charge was taken in fiscal year 2021.

We then determined the discounted cash flows of the subleases did not exceed the book value of the right of use asset, and an impairment charge of $ 5.0 million was recorded in fiscal year 2020 to “Impairment of goodwill, intangible and other assets” in the Consolidated Statements of Operations.

We recorded $ 69.4 million and $ 62.8 million in non-cash additions to our right of use assets and lease liabilities for the fiscal year ended September 30, 2022 and 2021, respectively.

CONTINGENCIES

Currently, and from time to time, we are involved in various claims, disputes, lawsuits, investigations and legal and regulatory proceedings.

Currently, and from time to time, we are involved in various claims, disputes, lawsuits, investigations, and legal and regulatory proceedings, including the matter described below.

We accrue for contingencies if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies requires judgments and is highly subjective about future events.

The amount of resulting loss may differ from these estimates.

While we are unable to determine the ultimate outcome of any current litigation or regulatory actions, we do not believe the resolution of any particular matter will have a material adverse effect on our financial condition, results of operations or liquidity.

Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies requires judgments and is highly subjective about future events, and the amount of resulting loss may differ from these estimates.

Except as noted below, we do not believe the resolution of any particular matter will have a material adverse effect on our financial condition, results of operations or liquidity.

On October 14, 2021, Andrew Kowlessar filed an action in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida styled Andrew Kowlessar, individually and on behalf of all others similarly situated vs.

d/b/a Value Pawn & Jewelry (Case No.

CACE-21-018864).

The matter subsequently was amended and removed to the United States District Court of the Southern District of Florida as Andrew Kowlessar, individually and on behalf of all others similarly situated vs.

EZPAWN Florida, Inc.

d/b/a Value Pawn & Jewelry (Case No.

0:21-cv-62362-RKA).

In May 2022, the federal court action was dismissed and the case was refiled in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida (Case No.

2022-008506-CA-01).

The complaint was brought under Section 501.059, Florida Statutes, the Florida Telephone Solicitation Act (“Act”), and alleges certain text messages were sent in violation of the Act.

The matter involves claims by a single individual, but alleges a class of persons who may have similar claims of violations of the Act and seeks class certification.

On June 16, 2022, following discovery and pre-trial mediation, the parties agreed to a settlement of all asserted claims and entered into a Settlement Agreement and Release.

The agreed settlement requires the Company to make available up to $ 5 million to be used to pay verified claims (not to exceed $ 70 per verified claimant), as well as attorneys’ fees and costs.

The agreed settlement was

approved by the court on October 24, 2022;

the period for submitting claims expired on November 8, 2022;

and the third party claims administrator is in the process of verifying the submitted claims.

The Company recorded a charge during the quarter ended June 30, 2022 representing the estimated liability for the settlement of this matter and believes the accrual remains sufficient to cover the Company’s liability in this matter as finally determined.

SEGMENT INFORMATION

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As a result, Lana is no longer an operating or reportable segment.

Our historical segment results have been recast to conform to current presentation.

We currently report our segments as follows:

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• Latin America Pawn — All pawn activities in Mexico and other parts of Latin America;

• Other International — Primarily our equity interest in the net income of Cash Converters and RDC.

There are no inter-segment revenues presented below, and the amounts below were determined in accordance with the same accounting principles used in our condensed consolidated financial statements.

• Other Investments — Primarily our equity interest in the net income of Cash Converters along with our investment in Founders and RDC.

There are no inter-segment revenues presented below, and the amounts below were determined in accordance with the same accounting principles used in our consolidated financial statements.

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

2 unchanged sentences

Pawn Latin America Pawn Other

International Total Segments Corporate Items Consolidated

Investments Total Segments Corporate Items Consolidated

Merchandise sales $ 391,958 $ 140,928 $ — $ 532,886 $ — $ 532,886

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Jewelry scrapping cost of goods sold 22,755 5,941 — 28,696 — 28,696

Net revenues 349,541 99,524 420 449,485 — 449,485

Gross profit 405,766 122,270 111 528,147 — 528,147

Segment and corporate expenses (income):

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(Gain) loss on sale or disposal of assets and other 51 ( 37 ) — 14 ( 688 ) ( 674 )

Other Charges — 229 — 229 — 229

Interest expense — — — — 9,972 9,972

3 unchanged sentences

Segment contribution $ 129,051 $ 24,054 $ 1,838 $ 154,943

Income (loss) from continuing operations before income taxes $ 107,209 $ ( 91,147 ) $ 16,062

Income (loss) before income taxes $ 154,943 $ ( 87,230 ) $ 67,713

Fiscal Year Ended September 30, 2021

1 unchanged sentence

Pawn Latin America Pawn Other

International Total Segments Corporate Items Consolidated

Investments Total Segments Corporate Items Consolidated

Merchandise sales $ 341,495 $ 101,303 $ — $ 442,798 $ — $ 442,798

5 unchanged sentences

Jewelry scrapping cost of goods sold 13,001 9,847 — 22,848 — 22,848

Other cost of revenues — 101 953 1,054 — 1,054

Net revenues 359,235 87,096 2,870 449,201 — 449,201

Operating expenses (income):

Gross profit 349,541 99,524 420 449,485 — 449,485

Segment and corporate expenses (income):

Store expenses 253,344 77,493 — 330,837 — 330,837

General and administrative — — — — 56,495 56,495

Impairment of goodwill, intangible and other assets 10,000 35,938 1,149 47,087 7,579 54,666

Depreciation and amortization 10,650 7,371 — 18,021 12,651 30,672

3 unchanged sentences

Interest income — ( 2,016 ) — ( 2,016 ) ( 461 ) ( 2,477 )

Equity in net loss of unconsolidated affiliates — — 2,429 2,429 — 2,429

Equity in net income of unconsolidated affiliates — — ( 3,803 ) ( 3,803 ) — ( 3,803 )

Other (income) expense — ( 840 ) ( 173 ) ( 1,013 ) 223 ( 790 )

Segment contribution (loss) $ 73,106 $ ( 26,659 ) $ ( 10,359 ) $ 36,088

Income (loss) from continuing operations before income taxes $ 36,088 $ ( 106,183 ) $ ( 70,095 )

Segment contribution $ 85,520 $ 17,293 $ 4,396 $ 107,209

Income (loss) before income taxes $ 107,209 $ ( 91,147 ) $ 16,062

Fiscal Year Ended September 30, 2020

1 unchanged sentence

Pawn Latin America Pawn Other

International Total Segments Corporate Items Consolidated

Investments Total Segments Corporate Items Consolidated

Merchandise sales $ 391,921 $ 106,292 $ — $ 498,213 $ — $ 498,213

6 unchanged sentences

Other cost of revenues — 101 953 1,054 — 1,054

Net revenues 385,959 105,196 3,293 494,448 — 494,448

Operating expenses (income):

Gross profit 359,235 87,096 2,870 449,201 — 449,201

Segment and corporate expenses (income):

Store expenses 261,608 69,916 5,246 336,770 — 336,770

General and administrative — — — — 54,133 54,133

Impairment of goodwill and intangibles assets 10,000 35,938 1,149 47,087 7,579 54,666

Depreciation and amortization 11,030 7,315 68 18,413 12,414 30,827

Loss on sale or disposal of assets 3,402 691 282 4,375 24 4,399

Gain (loss) on sale or disposal of assets 385 ( 72 ) ( 20 ) 293 508 801

Other Charges 3,106 1,715 3,802 8,623 11,765 20,388

Interest expense — 685 549 1,234 21,238 22,472

1 unchanged sentence

Equity in net loss of unconsolidated affiliates — — 2,429 2,429 — 2,429

Impairment of investment in unconsolidated affiliates — — 19,725 19,725 — 19,725

Other (income) expense — ( 156 ) 6 ( 150 ) 133 ( 17 )

Segment contribution (loss) $ 73,106 $ ( 26,659 ) $ ( 10,359 ) $ 36,088

Income (loss) from continuing operations before income taxes $ 98,969 $ ( 94,795 ) $ 4,174

Income (loss) before income taxes $ 36,088 $ ( 106,183 ) $ ( 70,095 )

The following table presents separately identified segment assets:

1 unchanged sentence

Pawn Latin America Pawn Other

International Corporate Total

Investments Corporate Total

Assets as of September 30, 2022

8 unchanged sentences

Total assets 779,271 233,347 38,993 215,300 1,266,911

The net assets of our Latin America Pawn segment, exclusive of intercompany amounts and inclusive of certain other assets not separately identified above, were $ 199.2 million as of September 30, 2021.

The following tables provide geographic information:

8 unchanged sentences

(in thousands) 2022 2021

Long-lived tangible assets:

Property and equipment, net:

United States $ 32,594 $ 30,651

1 unchanged sentence

Other Latin America 4,326 $ 3,905

Total long-lived tangible assets $ 53,811 $ 56,986

Property and equipment, net $ 56,725 $ 53,811

SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

18 unchanged sentences

Accrued sales and VAT taxes 7,279 10,936

Accrued income taxes payable 2,663 3,826

Other current liabilities 15,151 16,388

1 unchanged sentence

Unrecognized tax benefits, non-current $ 2,241 $ 2,571

Other long-term liabilities 7,814 6,635

Other non-current liabilities 6,508 7,814

Other long-term liabilities $ 8,749 $ 10,385

1 unchanged sentence

The following table provides information on our valuation and qualifying accounts not disclosed elsewhere:

(in thousands) Balance at Beginning of Period Charged to Expense Charged to Revenue Deductions Balance at End of Period

(in thousands) Balance at Beginning of Period Charged to Expense Deductions Balance at End of Period

Allowance for valuation of inventory:

6 unchanged sentences

Year Ended September 30, 2020 10,036 — 3,357 6,679

Allowance for uncollectible consumer loan fees and interest receivable:

Year Ended September 30, 2021 $ — $ — $ — — $ —

Year Ended September 30, 2020 540 — — 540 —

Year Ended September 30, 2019 331 — 209 — 540

Allowance for valuation of deferred tax assets:

2 unchanged sentences

Year Ended September 30, 2020 18,094 430 — 18,524

The following table provides supplemental disclosure of Consolidated Statements of Cash Flows information:

Fiscal Year Ended September 30,

(in thousands) 2022 2021 2020

Supplemental disclosure of cash flow information

Cash and cash equivalents $ 206,028 $ 253,667 $ 304,542

Restricted cash 8,341 9,957 8,011

Total cash and cash equivalents and restricted cash $ 214,369 $ 263,624 $ 312,553

Cash paid during the period for interest $ 8,230 $ 8,230 $ 8,489

Cash paid during the period for income taxes, net $ 15,899 $ 3,696 $ 9,753

Non-cash investing and financing activities:

Pawn loans forfeited and transferred to inventory $ 300,487 $ 212,756 $ 241,252

Transfer of consideration for acquisition — 1,545 —

Transfer of stock consideration for other investment 1,500 — —

Acquisition earn-out contingency — 4,608 —

Accrued acquisition consideration held as restricted cash — 1,986 —

SUBSEQUENT EVENTS

On October 1, 2021, we purchased an additional 13 million shares of Cash Converters for $ 2.5 million.

On November 2, 2022, we purchased an additional 13 million shares of Cash Converters for $ 2.0 million.

This purchase increased our total ownership in Cash Converters to 273,939,157 shares, representing a 43.7 % ownership interest.

Additionally, in October 2021, we received a cash dividend of $ 1.7 million from Cash Converters.

On October 6, 2021, the Company invested $ 15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders One, LLC (“Founders”), a newly-formed entity with one other member.

Founders used that $ 15.0 million to acquire an equity interest in Simple Management Group, Inc.

(“SMG”) which owns and operates more than 20 pawn stores principally in the Caribbean region, with plans to build and acquire more stores in that region.

This investment in Founders is accounted for utilizing the measurement alternative within ASC 321, Investments — Equity Securities.

QUARTERLY INFORMATION (UNAUDITED)

(in thousands, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter

Year Ended September 30, 2021

Total revenues $ 178,135 $ 184,939 $ 174,033 $ 192,444

Net revenues $ 108,390 $ 113,748 $ 108,021 $ 119,326

Net income (loss) $ 4,299 $ 5,330 $ ( 2,570 ) $ 1,553

Basic earnings (loss) per share $ 0.08 $ 0.10 $ ( 0.05 ) $ 0.03

Diluted earnings (loss) per share $ 0.08 $ 0.10 $ ( 0.05 ) $ 0.03

(in thousands, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter

Year Ended September 30, 2020

Total revenues $ 222,435 $ 223,280 $ 210,224 $ 166,839

Net revenues $ 130,069 $ 127,362 $ 102,175 $ 89,596

Net income (loss) $ 1,238 $ ( 40,874 ) $ ( 5,487 ) $ ( 23,340 )

Basic earnings (loss) per share $ 0.02 $ ( 0.74 ) $ ( 0.10 ) $ ( 0.42 )

Diluted earnings (loss) per share $ 0.02 $ ( 0.74 ) $ ( 0.10 ) $ ( 0.42 )

Additionally, in November 2022, we received a cash dividend of $ 1.7 million from Cash Converters.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data