What changed in this filing

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Item 1A. Risk Factors

2024-11-13 compared with 2023-11-15 · 36 added, 15 removed, 194 unchanged (21% of the section changed)

46 unchanged sentences

The statute of limitations applicable to most of the pre-closing years has now expired, but AlphaCredit has informed us that they filed an amended return for 2016, which they claim extends the statute of limitations for that year.

We were in discussions with AlphaCredit regarding the validity of the indemnity claim, the amount of any continuing exposure and whether some or all of the escrow can now be released.

Those discussions have been interrupted due to AlphaCredit’s recent emergence from a concurso mercantil (insolvency) proceeding in Mexico with new management.

The escrowed funds were not impacted by that proceeding, and we are continuing to pursue release of the funds.

We are continuing to pursue release of the funds.

One person beneficially owns all of our voting stock and generally controls the outcome of all matters requiring a vote of stockholders, which may influence the value of our publicly traded non-voting stock.

37 unchanged sentences

We made the initial investment in November 2009 and have made incremental investments periodically since then.

The success of this strategic investment is dependent on a variety of factors, including Cash Converters’s business performance and the market’s assessment of that performance.

In December 2022, the Australian Parliament passed the Financial Sector Reform Bill 2022, which establishes lending limits on small amount credit contracts.

The bill became effective in June 2023, and could adversely impact Cash Converters’ financial position or results of operations.

In response to the new law, Cash Converters recognized a one-time, non-cash impairment expense of AUD $110.5 million against goodwill in their financial statements for the period ended December 31, 2022 and, based upon our 43.7% ownership of Cash Converters at the time, we recorded $32.4 million of our share of their non-cash goodwill impairment charge during the second quarter of our fiscal 2023.

Any additional decline in Cash Converters’ operating results resulting from the change of law or other factors could adversely affect our financial performance.

The success of this strategic investment is dependent on a variety of factors, including Cash Converters’ business performance and the market’s assessment of that performance.

In December 2022, the Australian Parliament passed the Financial Sector Reform Bill 2022, which establishes lending limits on small amount credit contracts and that bill became effective in June 2023.

To reflect the expected adverse impact to its operating results, Cash Converters recorded a one-time, non-cash impairment expense during the period ended December 31, 2022 and we recorded our share of that charge during the second quarter of our fiscal 2023.

We have recorded a number of impairments to the carrying value of our investment in Cash Converters in the past.

After an analysis of Cash Converters’ stock price performance and other factors, we determined the fair value of our investment in Cash Converters at September 30, 2024 was greater than its carrying value.

Strategic Investments of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data.” If the fair value of our investment declines and we determine that such decline is other-than-temporary, we may be required to further impair our investment and recognize the related investment loss, which would adversely affect our results of operations and financial position in the period of impairment.

Strategic Investments of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data.” If the fair value of our investment declines and we determine that such decline is other-than-temporary, we may be required to further impair our investment and recognize the related investment loss, which would adversely affect our results of operations and financial position in the period of impairment.

Furthermore, there can be no assurance that we will be able to dispose of some or all of our investment in Cash Converters on favorable terms, should we decide to do so in the future.

2 unchanged sentences

We have certain investments in other companies.

Organization and Summary of Significant Accounting Policies — Investments of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data.” Our ability to recover our investment in these companies is heavily dependent on their success and performance, potentially including their ability to obtain further debt or equity financing.

To the extent that any of such companies is not successful, we may be required in future periods to impair our investment and recognize related investment losses.

Organization And Summary Of Significant Accounting Policies — Investments of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data.” Our ability to recover our investment in these companies is heavily dependent on their success and performance, potentially including their ability to obtain further debt or equity financing.

To the extent that any of such companies are not successful, we may be required in future periods to impair our investment and recognize related investment losses.

We may incur property, casualty or other losses, including losses related to natural disasters such as hurricanes, earthquakes and volcanoes.

24 unchanged sentences

Organization and Summary of Significant Accounting Policies and Note 6:

Goodwill and Intangible Assets of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data” for a discussion of our annual impairment tests performed for goodwill and indefinite-lived intangible assets.

Goodwill and Intangible Assets of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data” for a discussion of our annual impairment tests performed for goodwill and indefinite-lived intangible assets.

The conversion feature of our convertible notes, if triggered, may adversely affect our financial condition and operating results.

We have outstanding a total of $367.8 mill ion of convertible notes.

We have a total of $333.4 million of converti ble notes outstanding as of September 30, 2024.

Debt of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data.” If the conversion feature of any of those convertible notes is triggered, holders will be entitled to convert the notes at their option at any time during specified periods.

8 unchanged sentences

Taking into consideration the shares that are issued and outstanding, as well as the shares that have been reserved for issuance pursuant to convertible notes, outstanding equity incentive compensation awards and the conversion of the Class B Common Stock, we had approximately 7.7 million shar es of authorized Class A Common Stock available for other uses as of September 30, 2024 .

We expect that number will be reduced to 2.1 million following the issuance of currently approved Long-Term Incentive awards in November 2023 .

We expect that number will be reduced to 7.0 million fol lowing the issuance of currently approved Long-Term Incentive awards in November 2024 .

There fore, our ability to issue shares of Class A Common Stock (other than pursuant to the existing reserved-for commitments), or securities or instruments that are convertible into or exchangeable for shares of Class A Common Stock, may be limited until such time additional authorized, unissued and unreserved shares become available or unless we determine we are unlikely to issue all of the shares that are currently reserved.

63 unchanged sentences

We face other risks discussed under “ Part II, Item 7A — Quantitative and Qualitative Disclosures about Market Risk.

UNRESOLVED STAFF COMMENTS

CYBERSECURITY

Cybersecurity Risk Management and Strategy

We face various cybersecurity risks, including those related to unauthorized access to and misuse of data, system interruptions, ransomware, malicious software and other threats.

Our cybersecurity program incorporates information technology, retail technology and customer products designed to mitigate cyber risks.

Our security measures are customized to meet our unique business requirements and encompass firewalls, intrusion detection and prevention systems, encryption and multi-factor authentication.

We also engage external experts to enhance and assess our cybersecurity measures in the form of maturity assessments, incident response, penetration testing and other advisory services.

We adhere to the practices and standards outlined by the National Institute of Standards and Technology Cyber Security Framework.

We employ continual monitoring of our systems and data, managed by an external detection and response firm.

In the event of a cyber incident, we maintain an incident response plan coordinated across multiple departments.

This strategy is designed for rapid and effective incident management to minimize operational disruption.

Our response protocol includes steps for detection, containment, eradication, recovery and post-incident review, including impact on safety, data loss, operational disruption, cost and potential reputational damage.

Recognizing our employees as a vital defense mechanism, we provide cybersecurity, privacy and information-handling training.

Additionally, we conduct regular phishing exercises to enhance employee vigilance.

Our educational programs aim to raise awareness about cyber risks and teach employees to safeguard the Company, our customers and themselves against cyber threats.

These programs inform our workforce about the latest cybersecurity dangers and safe online practices, including secure access, phishing awareness, remote work security and reporting suspicious activities.

Cybersecurity Governance and Oversight

Our cybersecurity governance framework is structured to promote accountability and ongoing enhancement of cybersecurity measures.

Management of the cybersecurity program involves cross-functional resources, our Cyber and Technology Risk Committee, an internal multi-departmental committee formed to address cyber and data privacy matters.

The cybersecurity program is led by our Chief Information Security Officer (“CISO”) who reports to the Chief Legal Officer.

The Internal Audit Department monitors and reviews our cybersecurity initiatives.

The Board of Directors is responsible for overseeing and monitoring the material risks facing the Company.

The Audit and Risk Committee of the Board is charged with overseeing our risk management framework, including cybersecurity risks.

The CISO reports directly to the Audit and Risk Committee on cybersecurity risks on a quarterly basis.

To date, we have not identified any cybersecurity threats or incidents that have had or are likely to have a material impact on our business, financial condition or results of operations.

Nonetheless, the escalation of cybersecurity threats poses a risk to our systems, networks and products and services, which, despite our efforts to mitigate these risks, may not protect against all incidents.

For a detailed discussion on how cybersecurity risks could materially impact our business, see “Part I, Item 1A — Risk Factors.”

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 1A. Risk Factors