What changed in this filing

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Item 1A. Risk Factors

2023-02-06 compared with 2022-02-28 · 121 added, 127 removed, 396 unchanged (39% of the section changed)

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Risks Related to the Company’s Strategy, Business and Operations

• The Company faces significant competition from banks, credit unions, internet-based lenders, point-of-sale consumer finance companies, other short-term consumer lenders, governmental entities and other organizations offering similar financial services and retail products to those offered by the Company.

• The Company faces significant competition from banks, credit unions, internet-based lenders, point-of-sale consumer finance companies, other short-term consumer lenders, LTO companies, general and specialty retailers, governmental entities and other organizations offering similar financial services and retail products to those offered by the Company.

• A decrease in demand for the Company’s products and services and the failure of the Company to adapt to such decreases could adversely affect the Company’s results of operations.

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Risks Related to the Company’s Regulatory, Legislative and Legal Environment

• The Company is the subject of a lawsuit initiated by the CFPB alleging violations of the MLA and the Company’s predecessor company’s consent order with the CFPB.

• The Company’s products and services are subject to extensive regulation and supervision under various federal, state and local laws, ordinances and regulations in both the U.S.

and Latin America and consumer finance companies that serve credit-constrained consumers, like the Company, face increasing regulatory scrutiny under the current presidential administration and regulatory environment.

and regulatory environment.

• The adoption of new laws or regulations or adverse changes in, or the interpretation or enforcement of, existing laws or regulations affecting the Company’s products and services could adversely affect its financial condition and operating results.

• If AFF’s originating bank partner model is successfully challenged or deemed impermissible, it could be found to be in violation of licensing, interest rate limit, lending or brokering laws and face penalties, fines, litigation or regulatory enforcement.

• The Company is the subject of a lawsuit initiated by the CFPB alleging violations of the MLA and the Company’s predecessor company’s consent order with the CFPB and related securities litigation.

• Media reports, statements made by regulators and elected officials and public perception in general of pawnshops, LTO and retail finance products for credit-constrained consumers as being predatory or abusive could materially adversely affect the Company’s businesses.

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and Latin America, could have a material adverse effect on the Company’s business, prospects, results of operations and financial condition.

• The sale and pawning of firearms, ammunition and certain related accessories is subject to current and potential regulation.

Risks Related to the AFF Acquisition and Business

• The Company may fail to realize all of the anticipated benefits of the AFF Acquisition, or those benefits may take longer to realize than expected.

The Company may also encounter significant difficulties in integrating the AFF business.

• The AFF business is dependent on merchant partners for its transaction volume and its growth is primarily driven by its ability to attract additional merchants and retain and grow its relationships with its existing merchant partners.

• The sale and pawning of firearms, ammunition and certain related accessories is subject to current and potential regulation and exposes the Company to reputational and litigation risk if such firearms, ammunition and related accessories are utilized in the commission of a crime.

Risks Related to the AFF Business

• The AFF business is dependent on merchant partners for its transaction volume, and its growth is primarily driven by the success of its existing merchant partners and its ability to attract additional merchants and retain and grow its relationships with its existing merchant partners.

• The AFF business derives a significant portion of its revenue from several top merchant partners.

The loss of business or platform support from one or more of these top merchant partners could have a material adverse effect on the AFF business.

The loss of business, transaction volumes or platform support from one or more of these top merchant partners could have a material adverse effect on the AFF business.

• The AFF business relies extensively on its proprietary decisioning platform and if such platform is not effective, it could have a material impact on the AFF business and its financial condition and results of operations.

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Risks Related to Tax and Financial Matters

• The Company’s existing and future levels of indebtedness and any potential earnout payments payable in connection with the AFF Acquisition could adversely affect its financial health, its ability to obtain financing in the future, its ability to react to changes in its business and its ability to fulfill its obligations under such indebtedness.

• The Company’s existing and future levels of indebtedness could adversely affect its financial health, its ability to obtain financing in the future, its ability to react to changes in its business and its ability to fulfill its obligations under such indebtedness.

• Adverse changes in interest rates could negatively impact the Company’s operating results.

• Declines in commodity market prices of gold, other precious metals and diamonds could negatively affect the Company’s profits.

• The Company’s financial position and results of operations may change significantly due to fluctuations in currency exchange rates in Latin American markets.

• Unexpected changes in both domestic and foreign tax laws and policies could negatively impact the Company’s operating results.

Risks Related to Economic and Market Environment

• The COVID-19 pandemic has adversely impacted, and may materially and adversely impact in future periods, the Company’s business and results of operations.

• A sustained deterioration of economic conditions or an economic crisis and government actions taken to limit the impact of such an economic crisis could reduce demand or profitability for the Company’s products and services which would result in reduced earnings.

• The price of the Company’s common stock has fluctuated substantially over the past several months and may continue to fluctuate substantially in the future.

• A material worsening of the COVID-19 pandemic or other health emergency and government stimulus programs related thereto could materially and adversely impact the Company’s business and results of operations.

• Climate change, including increased frequency of extreme weather events, and related regulations could adversely affect the Company’s business and damage our reputation.

Strategic and Business Risks

Increased competition from other pawnshops, point-of-sale consumer finance companies, other short-term consumer lenders, governmental entities and other organizations offering similar financial services and retail products offered by the Company could adversely affect the Company’s results of operations.

Increased competition from other pawnshops, point-of-sale consumer finance companies, other short-term consumer lenders, other LTO companies, governmental entities and other organizations offering similar financial services and retail products offered by the Company could adversely affect the Company’s results of operations.

The Company’s principal competitors are other pawnshops, branch-based consumer loan or finance companies, internet-based lenders, LTO stores, point-of-sale, LTO and consumer finance providers, banks, credit unions and various other types of consumer finance companies that serve the Company’s primarily credit-constrained customer base.

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A decrease in demand for the Company’s products and services and the failure of the Company to adapt to such decreases could adversely affect the Company’s results of operations.

Although the Company actively manages its product and service offerings to ensure that such offerings meet the needs and preferences of its customer base and merchant partners, in the case of the AFF business, the demand for a particular product or service may decrease due to a variety of factors, including many that the Company may not be able to control, anticipate or respond to in a timely manner, such as the availability and pricing of competing products or technology, changes in customers’ financial conditions as a result of changes in unemployment levels, declines in consumer spending habits related to general economic conditions, inflation, public health and safety issues, fuel prices, interest rates, government sponsored economic stimulus programs, social welfare or benefit programs, real or perceived loss of consumer confidence or regulatory restrictions that increase or reduce customer access to particular products.

Although the Company actively manages its product and service offerings to ensure that such offerings meet the needs and preferences of its customer base and merchant partners, in the case of the AFF business, the demand for a particular product or service may decrease due to a variety of factors, including many that the Company may not be able to control, anticipate or respond to in a timely manner, such as the availability and pricing of competing products or technology, changes in customers’ financial conditions as a result of changes in unemployment levels, declines in consumer spending habits related to general economic conditions, inflation, weather events, public health and safety issues, fuel prices, interest rates, government sponsored economic stimulus programs, social welfare or benefit programs, real or perceived loss of consumer confidence or regulatory restrictions that increase or reduce customer access to particular products.

The AFF business also competes in an industry that is subject to significant technological change and disruption and AFF’s ability to meet the needs of both merchants and consumers is dependent on its ability to adequately adapt and respond to these changes.

The Company’s retail sales depend in large part on sufficient inventory levels driven primarily by forfeited collateral on pawn loans.

If demand for pawn loans decreases, inventory levels typically decline, which can have a material adverse impact on retail sales.

If demand for pawn loans decreases, inventory levels typically decline, which can negatively impact retail sales.

Should the Company fail to adapt to a significant change in its customers’ demand for, or regular access to, its products, the Company’s revenue could decrease significantly.

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Furthermore, future acquisitions may be in jurisdictions in which the Company does not currently operate or in lines of business that are new to the Company, which could make the successful consummation and integration of any such acquisitions more difficult.

Attractive acquisition targets may also become increasingly scarce in future periods or in jurisdictions the Company would like to expand its operations in.

Failure to successfully integrate an acquisition

could have an adverse effect on the Company’s business, results of operations and financial condition, and failure to successfully identify attractive acquisition targets and complete such acquisitions on favorable terms could have an adverse effect on the Company’s growth.

Acquisition targets may also become increasingly scarce in future periods or harder to acquire at attractive valuations.

Failure to successfully integrate an acquisition could have an adverse effect on the Company’s business, results of operations and financial condition, and failure to successfully identify attractive acquisition targets and complete such acquisitions on favorable terms could have an adverse effect on the Company’s growth.

Additionally, any acquisition has the risk that the Company may not realize a return on the acquisition or the Company’s investment.

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The Company’s future success, including its ability to achieve its growth and profitability goals, is dependent on the ability of its management team to execute on its long-term business strategy, which requires them to, among other things:

(1) pursue organic growth by opening new pawn stores and expanding AFF’s network of merchant partners, (2) identify attractive acquisition opportunities, close on such acquisitions on favorable terms and successfully integrate acquired businesses, (3) encourage and improve customer traffic at its pawn stores and the utilization of AFF’s products with its existing merchant partners, (4) improve the customer experience at its pawn stores and for AFF’s merchant partners and customers, (5) enhance productivity of its pawn stores, including through investments in technology, (6) control expenses in line with their current projections, (7) keep pace with technological change and improve the Company’s proprietary pawn point-of-sale and loan management system and AFF’s proprietary lease and loan management system and decisioning platform, and (8) effectively maintain its compliance programs and respond to regulatory developments and changes that impact its business.

(1) pursue organic growth by opening new pawn stores and expanding AFF’s network of merchant partners, (2) identify attractive acquisition opportunities, close on such acquisitions on favorable terms and successfully integrate acquired businesses, (3) encourage and improve customer traffic at its pawn stores and the utilization of AFF’s products with its existing merchant partners, (4) improve the customer experience at its pawn stores and for AFF’s merchant partners and customers, (5) enhance productivity of its pawn stores, including through investments in technology, (6) control expenses in line with current projections, (7) keep pace with technological change and improve the Company’s proprietary pawn point-of-sale and loan management system and AFF’s proprietary lease and loan management system and decisioning platform, and (8) effectively maintain its compliance programs and respond to regulatory developments and changes that impact its business.

Failure of management to execute its business strategy could negatively impact the Company’s business, growth prospects, financial condition or results of operations.

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The Company’s senior management team has significant pawn industry experience in both Latin America and the United States as well as public company experience, which the Company believes is unique in the pawn industry.

Furthermore, the addition of AFF’s senior management team following the AFF Acquisition, provides the Company with significant experience with retail POS payment solutions for credit-constrained customers.

The loss of services of any of the members of the Company’s senior management could adversely affect the Company’s business until a suitable replacement can be found, if at all.

Furthermore, AFF’s senior management team provides the Company with significant experience with retail POS payment solutions for credit-constrained customers.

The loss of services of any of the members of the Company’s senior management, including AFF’s management, could adversely affect the Company’s business until a suitable replacement can be found, if at all.

There may be a limited number of persons with the requisite skills to serve in these positions, and the Company cannot ensure that it would be able to identify or employ such qualified personnel on acceptable terms.

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The Company depends on hiring, training and retaining an adequate number of qualified employees to run its businesses.

The Company’s pawn business relies heavily on retail employees who work on an hourly basis and AFF relies heavily on sales, information technology, data science and customer service employees.

The Company’s pawn business relies heavily on hourly retail employees along with supervisory employees, while AFF relies heavily on sales, information technology, data science and customer service employees.

The Company must attract, train, and retain a large number of employees, while at the same time controlling labor costs.

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The lack of availability of adequate employees or the Company’s inability to attract and retain qualified employees, or an increase in wages and benefits to current employees could adversely affect its business, results of operations, cash flows and financial condition.

Furthermore, federal, state or local legislated increases in the minimum wage, as well as increases in additional labor cost components such as employee benefit costs, workers’ compensation insurance rates, compliance costs, fines and, in Mexico, costs associated with labor agreements, unions and profit sharing requirements, would increase the Company’s labor costs, which could have a material adverse effect on its business, prospects, results of operations and financial condition.

Furthermore, federal, state or local legislated increases in the minimum wage, as well as increases in additional labor cost components such as employee benefit costs, workers’ compensation insurance rates, compliance costs, fines and, in Mexico, additional costs associated with labor agreements, unions and profit sharing requirements, would increase the Company’s labor costs, which could have a material adverse effect on its business, prospects, results of operations and financial condition.

The Company’s business depends on the uninterrupted operation of the Company’s facilities, systems and business functions, including its information technology and other business systems, and reliance on other companies to provide key components of its business systems.

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An important component of the Company’s business involves collection, storage, use, disclosure, processing, transfer and other handling of a wide variety of sensitive, regulated and/or confidential information, including personally identifiable information, for various purposes in its business .

The Company has historically maintained minimal personal information with respect to its pawn transactions (primarily name, address and date of birth).

However, AFF obtains additional personal information, including social security numbers, dates of birth, bank account and payment card information and data from consumer reporting agencies (including credit report information), increasing the potential risk of unauthorized access to such confidential information.

The Company has historically acquired and maintained minimal personal information with respect to its pawn customers (primarily name, address and date of birth).

AFF obtains additional personal information, including social security numbers, dates of birth, bank account and payment card information and data from consumer reporting agencies (including credit report information) from its customers, increasing the potential risk of unauthorized access to such confidential information.

The Company is under constant threat of loss due to the velocity and sophistication of security breaches and cyber attacks.

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Any compromise of security could deter people from entering into transactions that involve transmitting confidential information to the Company’s systems and could harm relationships with the Company’s suppliers, which could have a material adverse effect on the Company’s business.

Actual or anticipated cyber attacks may cause the Company to incur substantial costs, including costs to prevent future attacks and investigate actual attacks, deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.

Despite the Company’s implementation of significant security measures, including the use of encryption and authentication technology to provide security and authentication to effective secure transmission of confidential information, these systems may still be vulnerable to physical break-ins, computer viruses, programming errors, attacks by third-parties or similar disruptive problems.

Actual or anticipated cyber attacks may cause the Company to incur substantial costs, including costs to prevent future attacks and investigate actual attacks, deploy additional personnel and

protection technologies, train employees and engage third-party experts and consultants.

Despite the Company’s implementation of significant security measures, including the use of encryption and authentication technology to provide security and authentication to effectively secure transmission of confidential information, these systems may still be vulnerable to physical break-ins, computer viruses, programming errors, attacks by third-parties or similar disruptive problems.

The Company may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber attacks .

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Furthermore, federal and state regulators and many federal and state laws and regulations require notice of any data security breaches that involve personal information.

These mandatory disclosures regarding a security breach are

costly to implement and often lead to widespread negative publicity, which may cause consumers to lose confidence in the effectiveness of the Company’s data security measures.

These mandatory disclosures regarding a security breach are costly to implement and often lead to widespread negative publicity, which may cause consumers to lose confidence in the effectiveness of the Company’s data security measures.

Any security breach suffered by the Company or its vendors, any unauthorized, accidental, or unlawful access or loss of data, or the perception that any such event has occurred, could result in a disruption to the Company’s operations, litigation, an obligation to notify regulators and affected individuals, the triggering of indemnification and other contractual obligations, regulatory investigations, government fines and penalties, reputational damage, and loss of customers and ecosystem partners, and its business could be materially and adversely affected.

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The Company also may be subject to liability as a result of crimes at its pawn stores.

The Company’s business requires it to maintain a significant supply of cash, loan collateral and inventories, including gold and other precious metals, in most of its pawn stores and certain corporate locations.

As a result, the Company is subject to the risk of employee and third-party robberies, riots, looting, burglaries and thefts.

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If the Company is unable to protect its intellectual property rights, its ability to compete could be negatively impacted.

The success of the Company’s business depends to a certain extent upon the value associated with its intellectual property rights, including its proprietary, internally developed point-of-sale and loan management system that is in use in its pawn stores and its proprietary decisioning technology that is used by the AFF business.

The success of the Company’s business depends to a certain extent upon the value associated with its intellectual property rights, including its proprietary, internally developed point-of-sale and loan management system that is in use in its pawn stores and its proprietary application and decisioning technology that is used by the AFF business.

The Company relies on a combination of trademarks, trade dress, trade secrets, proprietary software, website domain names and other rights, including confidentiality procedures and contractual provisions to protect its proprietary technology, processes and other intellectual property.

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This seasonality requires the Company to manage its cash flows over the course of the year.

If a governmental authority were to pursue economic stimulus actions or issue additional tax refunds, tax credits or other statutory payments at other times during the year, such actions could have a material adverse effect on the Company’s business, prospects, results of operations and financial condition during these periods.

If a governmental authority were to pursue economic stimulus actions or issue additional tax refunds, tax credits or other transfer payments at other times during the year, such actions could have a material adverse effect on the Company’s business, prospects, results of operations and financial condition during these periods.

If the Company’s revenues were to fall substantially below what it would normally expect during certain periods, the Company’s annual financial results, its ability to borrow on its unsecured credit facilities, and its ability to service its debt obligations or fund its operations, including originations for the AFF business, could be adversely affected.

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Actions by federal regulators in the U.S.

and other Latin American countries where the Company operates have caused many commercial banks, including certain banks used by the Company, to cease offering such services to the Company and other businesses in the pawn, LTO and consumer finance industries.

and Latin American countries where the Company operates have caused many commercial banks, including certain banks used by the Company, to cease offering such services to the Company and other businesses in the pawn, LTO and consumer finance industries.

The Company also relies significantly on outside vendors to provide services related to financial transaction processing (including credit and debit card processors), utilities, store security, armored transport, precious metal smelting, data and voice networks and other information technology products and services.

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In the past, this heightened regulatory scrutiny by the Justice Department, the FDIC and other regulators has caused some banks and ACH payment processors to cease doing business with consumer finance companies who are operating legally, without regard to whether those companies are complying with applicable laws, simply to avoid the risk of heightened scrutiny or even litigation.

These actions have reduced the number of banks and payment processors who provide ACH payment processing services and could conceivably make it increasingly difficult to find banking partners and payment processors in the future and/or lead to significantly increased costs for these services.

These actions have reduced the number of banks and payment processors who provide commercial banking services, credit facilities and ACH payment processing services which could conceivably make it increasingly difficult to find banking partners and payment processors in the future and/or lead to significantly increased costs for capital and these services.

Furthermore, the Company also relies on credit card companies and payment processors for a significant portion of its retail sales as well as payments on its pawn loans, LTO, RISA and bank loan products.

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Regulatory, Legislative and Legal Risks

The Company is the subject of a lawsuit initiated by the CFPB alleging violations of the MLA and the Company’s predecessor company’s 2013 CFPB consent order and a purported securities class action .

On November 12, 2021, the CFPB initiated a civil action in the United States District Court for the Northern District of Texas against FirstCash, Inc.

and Cash America West, Inc., two of the Company’s subsidiaries, alleging violations of the MLA.

The CFPB also alleges that FirstCash, Inc.

violated a 2013 CFPB order against its predecessor company that, among other things, required the predecessor company to cease and desist from further MLA violations.

The CFPB is seeking an injunction, redress for affected borrowers and a civil money penalty.

While the Company intends to vigorously defend itself against the allegations in the case, it cannot predict or determine the timing or final outcome of this matter, or the effect that any adverse determinations from the lawsuit may have on the Company.

An unfavorable determination in the lawsuit could result in the payment of substantial monetary damages, which could have a material effect on the Company’s business, results of operations or financial condition.

The Company may also be required to modify its business practices in the event of an unfavorable determination in the lawsuit, which could impact demand for its products and customer satisfaction.

Further, the legal costs associated with the lawsuit, which may not be covered by insurance, and the amount of time required to be spent by management and the Board of Directors on this matter, even if the Company is ultimately successful, could have a material effect on its business, financial condition and results of operations.

Furthermore, due to the impact of the announcement of the CFPB’s action on the Company’s stock price, the Company has become subject to a purported securities class action related to the CFPB’s lawsuit and may become subject to further related litigation.

An unfavorable result in these matters could also have a material impact on the Company’s financial condition and results of operations.

The Company’s products and services are subject to extensive regulation and supervision under various federal, state and local laws, ordinances and regulations in both the U.S.

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In addition, certain consumer advocacy groups, federal, state and local legislators and governmental agencies have also asserted that rules, laws and regulations should be tightened so as to severely limit, if not eliminate, the availability of pawn transactions, POS payment products and buy/sell agreements to consumers.

Moreover, the Company expects the current presidential administration to devote substantial attention to consumer protection matters, including more aggressive enforcement actions, and, as a result, businesses transacting with credit-constrained consumers could be held to higher standards of monitoring, disclosure and reporting, regardless of whether new laws or regulations governing the Company’s industry are adopted.

Moreover, the Company expects the current presidential administration in the U.S.

to devote substantial attention to consumer protection matters, including more aggressive enforcement actions, and, as a result, businesses transacting with credit-constrained consumers could be held to higher standards of monitoring, disclosure and reporting, regardless of whether new laws or regulations governing the Company’s industry are adopted.

It is difficult to assess the likelihood of the enactment of any unfavorable federal or state legislation or local ordinances, and there can be no assurance that additional legislative, administrative or regulatory initiatives will not be enacted that would severely restrict, prohibit, or eliminate the Company’s ability to offer certain products and services.

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In addition to potential damage to the Company’s reputation and brand, failure to comply with applicable federal, state and local laws and regulations such as those outlined elsewhere in these risk factors may result in the Company being subject to claims, lawsuits, fines and adverse publicity that could have a material adverse effect on its business, results of operations and financial condition.

On November 12, 2021, the CFPB initiated a civil action in the United States District Court for the Northern District of Texas against FirstCash, Inc.

and Cash America West, Inc., two of the Company’s subsidiaries, alleging violations of the MLA.

The CFPB also alleges that FirstCash, Inc.

violated a 2013 CFPB order against its predecessor company that, among other things, required the predecessor company to cease and desist from further MLA violations.

The CFPB is seeking an injunction, redress for affected borrowers and a civil monetary penalty.

On March 28, 2022, the CFPB filed a motion to strike certain affirmative defenses of the Company, which motion remains pending.

On April 27, 2022, the Company filed a motion for partial summary judgment, which remains pending.

On October 24, 2022, the Company filed a motion to dismiss the lawsuit due to the funding structure of the CFPB, which the motion alleges is unconstitutional.

This motion to dismiss follows the recent decision by the Fifth Circuit Court of Appeals, where the U.S.

District Court for the Northern District of Texas sits, finding that the CFPB is unconstitutionally structured based upon its funding mechanism.

The motion to dismiss remains pending.

On November 4, 2022, the case was stayed pending the CFPB appeal of the Fifth Circuit ruling to the United States Supreme Court.

The Company may also be required to modify its business practices in the event of an unfavorable determination in the lawsuit, which could result in increased operational costs and negatively impact demand for its products and customer satisfaction.

Further, the legal costs associated with the lawsuit, which may not be covered by insurance, and the amount of time required to be spent by management and the Board on this matter, even if the Company is ultimately successful, could have a material effect on its business, financial condition and results of operations.

Following the announcement of the CFPB’s action, the Company has become subject to a purported securities class action and derivative action related to the CFPB’s lawsuit and may become subject to further related litigation.

On January 14, 2022, plaintiff Genesee County Employees’ Retirement System filed a putative shareholder securities class action lawsuit (the “Litigation”) in the United States District Court for the Northern District of Texas against the Company and certain of its current officers styled Genesee County Employees’ Retirement System v.

FirstCash Holdings, Inc., et al ., Civil Action No.

4:22-CV-00033-P (N.D.

The complaint alleges that the defendants made materially false and/or misleading statements that caused losses to investors, including that the Company failed to disclose in public statements that the Company engaged in widespread and systemic violations of the MLA.

The Litigation does not quantify any alleged damages, but, in addition to attorneys’ fees and costs, it seeks to recover damages on behalf of the plaintiff and other persons who purchased or otherwise acquired Company stock during the putative class period from February 1, 2018 through November 12, 2021 at allegedly inflated prices and purportedly suffered financial harm as a result.

On June 8, 2022, the Company and named defendants filed a motion to dismiss, which remains pending.

The Company was named as a nominal defendant and certain of the Company’s current and former directors and officers were named as defendants in a shareholder derivative lawsuit filed on July 19, 2022 in the United States District Court for the Northern District of Texas and styled Treppel Family Trust U/A 08/18/18 Lawrence A.

Treppel and Geri D.

Treppel for the Benefit of Geri D.

Treppel and Larry A.

Treppel, Derivatively on Behalf of FirstCash Holdings, Inc., v.

al , Case 4:22-cv-00623-P (N.D.

The complaint makes similar allegations as the Litigation and alleges a single count for breach of fiduciary duty against the named derivative defendants.

The action does not quantify any alleged damages, but, in addition to attorneys’ fees and costs and certain equitable relief, the derivative plaintiff seeks to recover damages on behalf of the Company for purported financial harm and to have the court order changes in the Company’s corporate governance.

On August 8, 2022, the court stayed all proceedings in this derivative action pending the disposition of any motion to dismiss filed in the Litigation.

On November 1, 2022, the putative plaintiff dismissed Jorge Montanõ from the action without prejudice.

An unfavorable result in these matters could have a material impact on the Company’s financial condition and results of operations.

The FTC and the CFPB have regulatory, supervisory and enforcement powers over providers of consumer financial products and services in the U.S., and each could exercise its enforcement powers in ways that could have a material adverse effect on the Company’s business and financial results.

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If the CFPB or one or more state attorneys general or state regulators believe that the Company has violated any of the applicable laws or regulations or any consent orders or confidential memorandums of understanding against or with the Company, they could exercise their enforcement powers in ways that could have a material adverse effect on the Company’s business and financial results.

Furthermore, under the current presidential administration, the CFPB has been more aggressive in their exercise of the enforcement powers making it more likely, as evidenced by the CFPB’s action against the Company related to alleged violations of the MLA, that future enforcement actions will be brought against consumer finance companies providing services and products to credit-constrained customers.

Furthermore, under the current presidential administration in the U.S., the CFPB has been more aggressive in their exercise of the enforcement powers making it more likely, as evidenced by the CFPB’s action against the Company related to alleged violations of the MLA, that future enforcement actions will be brought against consumer finance companies providing services and products to credit-constrained customers.

Business—Government Regulation” for a further discussion of the regulatory authority of the CFPB.

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If AFF’s originating bank partner model is successfully challenged or deemed impermissible, it could be found to be in violation of licensing, interest rate limit, lending or brokering laws and face penalties, fines, litigation or regulatory enforcement.

Loans originated through the Bank’s program would have accounted for 5% of the Company’s total revenues during 2021 on a pro forma basis after giving effect to the AFF Acquisition as if it had closed on January 1, 2021 .

Loans originated through the Bank’s program accounted for 4% of the Company’s total revenues during 2022 .

AFF relies on its originating bank partner model to comply with various federal, state and other laws.

If the legal structure underlying AFF’s relationship with the Bank was successfully challenged, it may be found to be in violation of state licensing requirements and state laws regulating interest rates.

For example, AFF is currently responding to a subpoena from the New Jersey Attorney General related to its partner bank’s loan product, and in the state of New Mexico there is pending legislation which would effectively prohibit AFF’s use of the bank partner model in that state.

Such bank loan products in New Jersey and New Mexico would have accounted for less than 1% of the Company’s total revenues during 2021 on a pro forma basis after giving effect to the AFF Acquisition as if it had closed on January 1, 2021 .

In the event of such a challenge or if its arrangements with the Bank were to end for any reason, AFF would need to find and rely on an alternative bank relationship, rely on existing state licenses, obtain new state licenses, pursue a federal bank charter, offer consumer loans and/or be subject to the interest rate limitations of certain states.

In the event of such a challenge or if its arrangements with the Bank were to end for any reason, AFF would need to find and rely on an alternative bank relationship, rely on existing state licenses, obtain new state licenses, pursue a bank charter, offer consumer loans and/or be subject to the interest rate limitations of certain states.

AFF could be subject to litigation, whether private or governmental, or administrative action regarding the above claims.

The potential consequences of an adverse determination could include the inability to collect loans at the interest rates contracted for, licensing violations, the loans being found to be unenforceable or void, or the reduction of interest or principal, or other penalties or damages.

The potential consequences of an adverse determination could include the inability to collect loans at the interest rates contracted for, licensing violations, the loans being found to be unenforceable or void, the reduction of interest or principal, or other penalties or damages.

Third-party purchasers of loans facilitated through AFF’s platform also may be subject to scrutiny or similar litigation, whether based upon the inability to rely upon the “valid when made” doctrine or because a party other than the Bank is deemed the true lender.

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In particular, the Company may be involved in lawsuits or regulatory actions related to consumer finance and protection, employment, marketing, unclaimed property, competition matters, and other matters, including class action lawsuits brought against it for alleged violations of the Fair Labor Standards Act, state wage and hour laws, state or federal advertising laws, consumer protection, lending and other laws.

The consequences of defending proceedings or an adverse ruling in any current or future litigation, judicial or administrative proceeding, including consent orders or memorandums of understanding, could cause the Company to incur substantial legal fees, to have to refund fees and/or interest collected, refund the principal amount of advances, pay treble or other multiple damages, pay monetary penalties, fines, and/or modify or terminate the Company’s operations in particular states or countries.

The consequences of defending proceedings or an adverse ruling in any current or future litigation, judicial or administrative proceeding, including consent orders or memorandums of understanding, could cause the Company to incur substantial legal fees, have to refund fees and/or interest collected, refund the principal amount of advances, pay treble or other multiples of damages, pay monetary penalties, fines, and/or modify or terminate the Company’s operations in particular states or countries.

Defense or filing of any lawsuit or administrative proceeding, even if successful, could require substantial time, resources, and attention of the Company’s management and could require the expenditure of significant amounts for legal fees and other related costs.

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The sale and pawning of firearms, ammunition and certain related accessories is subject to current and potential regulation, which could have a material adverse effect on the Company’s reputation, business, prospects, results of operations and financial condition.

Because the Company accepts firearms as pawn collateral and buys and sells firearms, ammunition and certain related accessories in many U.S.

locations, the Company is required to comply with federal, state and local laws and regulations pertaining to the pawning, purchase, storage, transfer and sale of such products, and the Company is subject to reputational harm if a customer purchases or pawns a firearm that is later used in a deadly shooting.

Because the Company accepts firearms as pawn collateral and buys and sells firearms, ammunition and certain related accessories in many of its U.S.

pawn locations, the Company is required to comply with federal, state and local laws and regulations pertaining to the pawning, purchase, storage, transfer and sale of such products, and the Company is subject to reputational harm if a customer purchases or pawns a firearm that is later used in a deadly shooting.

Over the past several years, the purchase, sale and ownership of firearms, ammunition and certain related accessories has been the subject of increased media scrutiny and federal, state and local regulation.

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Furthermore, the Company may incur losses and reputational damage due to lawsuits relating to its performance of background checks on firearms purchases as mandated by state and federal law, the selling of firearms or the improper use of firearms sold by the Company, including lawsuits by individuals, municipalities, state or federal agencies or other organizations attempting to recover damages or costs from firearms retailers relating to the sale or misuse of firearms.

Furthermore, if any firearms sold by the Company are used in the commitment of any crimes or mass shootings, it could result in significant adverse media attention against the Company and have a material adverse impact on the reputation of the Company.

Furthermore, if any firearms sold by the Company are used in the commitment of any crimes or mass shootings, it could result in significant adverse media attention against the Company, have a material adverse impact on the reputation of the Company and result in material litigation against the Company.

Commencement of such lawsuits or any adverse media attention against the Company could have a material adverse effect on its business, reputation, prospects, results of operations and financial condition.

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These states or their respective regulatory bodies have established criteria the Company must meet in order to obtain, maintain, and renew those licenses.

In addition, the AFF business is also subject to certain states’ laws which regulate and require licensing, registration, notice filing or other approval by parties that engage in certain activity regarding consumer finance transactions, including facilitating and assisting

such transactions in certain circumstances.

Furthermore, certain states and localities have also adopted laws requiring licensing, registration, notice filing, or other approval for consumer debt collection or servicing, and/or purchasing or selling consumer loans.

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Foreign Operations Risks

The Company’s financial position and results of operations may fluctuate significantly due to fluctuations in currency exchange rates in Latin American markets.

The Company derives significant revenue, earnings and cash flow from operations in Latin America, where business operations are transacted in Mexican pesos, Guatemalan quetzales and Colombian pesos.

The Company’s financial position and results of operations may change significantly due to fluctuations in currency exchange rates in Latin American markets.

The Company derives significant revenue, earnings and cash flow from operations in Latin America, where business operations are transacted primarily in Mexican pesos, and in Guatemalan quetzales and Colombian pesos to a lesser extent.

The Company’s exposure to currency exchange rate fluctuations results primarily from the translation exposure associated with the preparation of the Company’s consolidated financial statements, as well as from transaction exposure associated with transactions and assets and liabilities denominated in currencies other than the respective subsidiaries’ functional currencies.

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Risks and uncertainties related to the Company’s foreign operations could negatively impact the Company’s operating results.

As of December 31, 2021, the Company had 1,744 store locations in Latin America, including 1,656 in Mexico, 60 in Guatemala, 15 in Colombia and 13 in El Salvador, and the Company plans to open additional stores in Latin America in the future.

As of December 31, 2022, the Company had 1,771 store locations in Latin America, including 1,682 in Mexico, 61 in Guatemala, 14 in Colombia and 14 in El Salvador, and the Company plans to open or acquire additional stores in Latin America in the future.

In addition, AFF owns a customer service call center operating in Jamaica and utilizes third-party call center services located in the Dominican Republic and Mexico.

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Specifically, the Company has significant exposure to fluctuations and devaluations of the Mexican peso and the health of the Mexican economy, which, in each case, may be negatively impacted by changes in U.S.

trade treaties, including the United States-Mexico-Canada

Agreement and corporate tax policy.

trade treaties, including the United States-Mexico-Canada Agreement and corporate tax policy.

In some cases, there have been negative reactions to the enacted and/or proposed policies as expressed in the media and by politicians in Mexico, which could potentially negatively impact U.S.

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The Company may fail to realize all of the anticipated benefits of the AFF Acquisition or those benefits may take longer to realize than expected.

The Company may also encounter significant difficulties in integrating the AFF business.

The Company’s ability to realize the anticipated benefits of the AFF Acquisition depends, to a large extent, on its ability to integrate the AFF business, which is a complex, costly and time-consuming process, and for the AFF business to achieve its projected growth rates.

AFF also represents a new line of business for the Company, which increases the complexity and challenges of the integration process as compared to the Company’s pawn acquisitions.

As a result of the AFF Acquisition, the Company must devote significant management attention and resources to integrate the business practices and operations of the Company and AFF.

The integration process may disrupt the Company’s business and, if implemented ineffectively, could restrict the realization of the full expected benefits.

The failure to meet the challenges involved in the integration process and to realize the anticipated benefits of the AFF Acquisition could cause an interruption of, or a loss of momentum in, the Company’s operations and could adversely affect its business, financial condition and results of operations.

In addition, the integration of the AFF business may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customers and other business relationships, and diversion of management’s attention.

Additional integration challenges include:

• difficulties in integrating and managing a new line of business with different products, including those with credit risk, retail merchant partners and additional regulatory risks;

• diversion of management’s attention to integration matters;

• difficulties in achieving anticipated synergies, business opportunities and growth prospects from the AFF Acquisition;

• difficulties in the integration of operations and systems;

• difficulties in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures;

• difficulties in managing the expanded operations of a significantly larger and more complex company;

• challenges in keeping existing merchant partners and obtaining new merchant partners;

• challenges in retaining and assimilating key personnel;

• the impact of potential liabilities the Company may be inheriting from AFF;

• difficulty addressing possible differences in corporate culture and management philosophies;

• a potential deterioration of the Company’s credit ratings.

Many of these factors are outside of the Company’s control and any one of them could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy, which could adversely affect the Company’s business, financial condition and results of operations and result in the Company becoming subject to litigation.

In addition, even if the AFF business is integrated successfully, the full anticipated benefits of the AFF Acquisition may not be realized, including the synergies, cost savings or sales or growth opportunities that are anticipated.

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As a result, it cannot be assured that the AFF Acquisition will result in the realization of the full anticipated benefits.

The AFF Acquisition may not be accretive and may cause dilution of the Company’s adjusted earnings per share, which may negatively affect the market price of the Company’s common stock.

The Company anticipates that the AFF Acquisition will be accretive to stockholders on an adjusted earnings per share basis.

This expectation is based on currently available net revenue and operating expense estimates, which may materially change.

The Company could also encounter additional transaction and integration-related costs or other factors such as the failure to realize all of the benefits anticipated in the AFF Acquisition.

All of these factors could cause dilution of the Company’s adjusted earnings per share or decrease or delay the expected accretive effect of the AFF Acquisition and cause a decrease in the market value of the Company’s common stock.

Failure to retain key employees could diminish the anticipated benefits of the AFF Acquisition.

The success of the AFF Acquisition will depend in large part upon the ability of the Company to retain personnel critical to the AFF business.

Employees may experience uncertainty about their future roles or apprehension about joining a larger and public company.

The corporate cultures may also differ, and some Company or AFF employees may choose not to remain with the Company.

If the Company is unable to retain Company or AFF personnel that are critical to the Company’s operations, the Company could experience disrupted operations, loss of customers, key information, expertise and know how, or unanticipated hiring and training costs, especially given that the Company’s existing management team has limited experience operating a line of business similar to the AFF business.

In addition, the loss of key personnel could diminish the anticipated benefits of the AFF Acquisition that are actually achieved by the Company.

The Company may be required to make earnout payments to the AFF sellers if certain conditions are met, including if the AFF business achieves earnout thresholds and if the Company’s stock price does not reach certain levels and, as a result, the Company’s financial position may be adversely impacted if it is required to make such payments.

In connection with the AFF Acquisition, the Company may be required to make earnout payments in the form of cash and/or shares of the Company’s common stock to the sellers of the AFF business as described below:

• The sellers of the AFF business are entitled to receive up to an additional $300.0 million o f consideration pursuant to an earnout if the AFF business achieves certain adjusted EBITDA targets following the closing of the AFF Acquisition (the “Earnout Consideration”).

In particular, the earnout provides the seller parties the right to receive up to $250.0 million of additional consideration if the AFF business achieves certain adjusted EBITDA targets for the period consisting of the fourth quarter of 2021 through the end of 2022 and up to $50.0 million if the AFF business achieves certain adjusted EBITDA targets for the first half of 2023.

The Earnout Consideration is payable in cash or, at the Company’s discretion and subject to obtaining any required stockholder approvals under the NASDAQ rules for such issuance, in shares of the Company’s common stock.

• The sellers of the AFF business are entitled to received up to $75.0 million of additional consideration in the event that the highest average stock price of the shares of the Company’s common stock being issued to the seller parties pursuant to that certain Business Combination Agreement, by and among the Company, AFF and the other parties thereto , dated October 27, 2021 (the “Acquisition Agreement”), for any 10-day period from the date of that certain Amendment to the Acquisition Agreement, dated as of December 6, 2021 (the “Amendment”), through February 28, 2023 (the “Highest Average Stock Price”) is less than $86.25 (the “Reference Price”).

In the event that the Highest Average Stock Price is less than the Reference Price, then the AFF sellers shall be entitled to an amount equal to such difference multiplied by the number of shares issued to the AFF sellers as stock consideration (approximately 8.05 million shares), with such amount capped at $75.0 million.

• In addition, the Amendment provided for a fixed $25.0 million working capital payment payable at the end of 2022.

If any of these earnout thresholds or stock price conditions are met, the Company may not have sufficient cash reserves to pay the cash amount due to the AFF sellers.

If the Company is able to pay these cash amounts, the payment may impede its ability to fund other aspects of its business, which would adversely affect its operating results and the price of its common stock and senior unsecured notes.

Additional Risks Related to the AFF Business

Risks Related to the AFF Business

If AFF is unable to attract additional merchants and retain and grow its relationships with its existing merchant partners, its business, results of operations, financial condition and future prospects would be materially and adversely affected.

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Historically, AFF has relied on a limited number of merchant partners for a significant portion of its total revenues and transaction volume.

On a pro forma basis after giving effect to the AFF Acquisition as if it had closed on January 1, 2021, AFF’s top five merchant partners accounted for an aggregate of 16% of combined pro forma 2021 revenues and future revenues and transaction volume of AFF may be similarly concentrated.

AFF’s top five merchant partners accounted for an aggregate of 5% of 2022 revenues and future revenues and transaction volume of AFF may be similarly concentrated.

The loss of any of these top merchant partners or groups of merchant partners for any reason, or a change of relationship with any of AFF’s key merchant partners could adversely affect the results of operations of the AFF business.

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Accounting, Tax and Financial Risks

The Company’s existing and future levels of indebtedness and any potential earnout payments payable in connection with the AFF Acquisition could adversely affect its financial health, its ability to obtain financing in the future, its ability to react to changes in its business and its ability to fulfill its obligations under such indebtedness.

The Company’s existing and future levels of indebtedness could adversely affect its financial health, its ability to obtain financing in the future, its ability to react to changes in its business and its ability to fulfill its obligations under such indebtedness.

As of December 31, 2022, including the Company's senior unsecured notes and the Company’s unsecured credit facilities, the Company had outstanding principal indebtedness of $1,389.0 million and availability of $278.8 million under its unsecured credit facilities, subject to certain financial covenants.

The Company's level of indebtedness and amounts owed pursuant to potential earnout payments resulting from the AFF Acquisition could:

The Company's level of indebtedness could:

• Make it more difficult for it to satisfy its obligations with respect to the Company’s senior unsecured notes and its other indebtedness, resulting in possible defaults on and acceleration of such indebtedness;

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Any of the foregoing impacts of the Company’s level of indebtedness could have a material adverse effect on its business, financial condition and results of operations.

In addition, the Company’s borrowings under its unsecured credit facilities bear interest at variable rates based on a fixed spread over the prevailing secured overnight rate (“SOFR”) and, as a result of the recent increase in interest rates, the Company’s borrowing expenses under its unsecured credit facilities increased in 2022.

The Company expects borrowing expenses in 2023 to further increase from 2022 levels due to interest rates remaining higher for the entire year.

Furthermore, the Company has, in the past, accessed the debt capital markets to refinance existing debt obligations and to obtain capital to finance growth.

However, the Company’s future access to the debt capital markets could become restricted due to a variety of factors, including a deterioration of the Company’s performance or financial condition, regulatory challenges facing the Company or industry, overall industry prospects or changes in debt capital markets or the economy generally and a general bias of some large banks against lending to companies operating in the pawn and specialty finance industries.

Inability to access the credit markets on acceptable terms, if at all, could have a material adverse effect on the Company’s financial condition and ability to fund future growth.

Additionally, the Company’s debt instruments include certain affirmative and negative covenants that require the Company to comply with certain financial covenants and impose restrictions on the Company’s financial and business operations, including limitations on liens, indebtedness, fundamental changes, asset dispositions, dividends and other similar restricted payments, transactions with affiliates, payments and modifications of certain existing debt, future negative pledges, and changes in the

nature of the Company’s business.

A failure to comply with the covenants contained in the Company’s debt instruments could result in an event of default or an acceleration of debt under its debt instruments.

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General Economic and Market Risks

The COVID-19 pandemic has adversely impacted, and will likely continue to adversely impact, the Company’s business and results of operations.

The COVID-19 pandemic has and may continue to adversely affect consumer traffic and demand for pawn loans and AFF’s retail finance products and has, and may continue to have, a material adverse effect on the Company’s results of operations.

The extent to which COVID-19 continues to impact the Company’s operations, results of operations, liquidity and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak (including the possibility of further surges or variants of concern of the virus), the efficacy of the vaccination programs in the jurisdictions in which the Company operates, supply chain disruptions, rising inflation and labor costs, its ability to maintain sufficient qualified personnel due to labor shortages, employee illness, quarantine, willingness to return to work, vaccine and/or testing mandates, face-coverings and other safety requirements, or travel and other restrictions, and the actions taken by governments, businesses and individuals to contain the impact of COVID-19, as well as further actions taken to limit the resulting economic impact.

These factors may adversely impact consumer, business, and government spending as well as customer demand for pawn loans and the Company’s retail finance products on an ongoing basis, each of which could adversely impact its business and operations.

While the Company saw positive results in the second half of 2021 despite the challenges raised by the COVID-19 environment, there remains uncertainty regarding how COVID-19 and general economic conditions will impact the Company’s business and operations in future periods.

Nevertheless, COVID-19 continues to present a material uncertainty which could adversely affect the Company’s results of operations, financial condition and cash flows in the future.

A sustained deterioration of economic conditions or an economic crisis and government actions taken to limit the impact of such an economic crisis could reduce demand or profitability for the Company’s products and services which would result in reduced earnings.

The Company’s business and financial results may be adversely impacted by sustained unfavorable economic conditions or unfavorable economic conditions associated with a global or regional economic crisis which, in either case, include un employment, declining personal income and consumer sentiment, inflation, adverse changes in interest or tax rates, effects of government initiatives to manage economic conditions and increased volatility of commodity markets and foreign currency exchange rates.

Specifically, a sustained or rapid deterioration in the economy, along with the potential enactment of government stimulus programs to attempt to limit such economic deterioration, could adversely impact the performance of the Company’s pawn loan and AFF’s lease and loan portfolio and consumer or market demand for discretionary consumer goods and services weakening demand for AFF’s products and also demand for pre-owned merchandise or gold sold in the Company’s pawnshops.

A sustained deterioration in the economy could also reduce the demand and resale value of pre-owned merchandise and reduce the amount that the Company could effectively lend on an item of collateral.

General economic conditions may have a material adverse impact on the Company’s business and financial results.

The Company’s business and financial results are dependent on overall economic conditions in the geographies in which it operates.

In particular, the Company’s business relies heavily on consumer spending, both with respect to retail sales at its pawnshops and demand for AFF’s products to facilitate purchases at its merchant partners.

A sustained or rapid downturn in economic conditions generally results in lower consumer confidence and demand for discretionary consumer goods and services weakening demand for AFF’s products and also demand for pre-owned merchandise sold in the Company’s pawnshops.

While demand for pawn loans generally remains strong in periods of economic uncertainty, there is no guarantee that such demand would not decrease in future downturns.

Furthermore, in periods of economic expansion and high employment, demand for pawn loans can suffer.

The current economic environment, characterized by rising inflation, higher interest rates, declines in consumer confidence and uncertainly about economic stability and a potential recession, has adversely affected demand for AFF’s products through 2022 and we expect these trends to continue with respect to AFF.

While retail sales at the Company’s pawnshops, due in part to the “deep value” nature of the products sold at its pawnshops, and demand for pawn loans have not been adversely affected by such economic trends in 2022, there is no guarantee that they will not be adversely affected should economic conditions deteriorate further.

A sustained deterioration in the economy could reduce the demand and resale value of pre-owned merchandise and reduce the amount that the Company could effectively lend on an item of collateral.

Such reductions could adversely affect pawn loan balances, pawn redemption rates, inventory balances, inventory mixes, sales volumes and gross profit margins.

Furthermore, labor shortages and inflation have also increased operating costs, having a negative effect on the Company’s

In addition, government stimulus programs in response to COVID-19 had an adverse impact on pawn loan demand and any future stimulus programs could have a similar adverse impact.

Furthermore, economic conditions and demand may also fluctuate by geographic region.

The current geographic concentration of the Company’s pawn stores and AFF’s merchant partners creates exposure to local economies and politics, and regional downturns.

As a result, the Company’s business is currently more susceptible to regional conditions than the operations of more geographically diversified specialty finance companies, and the Company is vulnerable to economic downturns or changing political landscapes in those regions.

The current geographic concentration of the Company’s pawn stores and AFF’s merchant partners creates exposure to local economies and politics, and regional downturns, including with respect to Latin American economies and politics, which tend to be more volatile than the U.S.

Any unforeseen events or circumstances that negatively affect these areas could materially adversely affect the Company’s revenues and profitability.

The price of the Company’s common stock has fluctuated substantially over the past several months and may continue to fluctuate substantially in the future.

The Company’s stock price has been, and may continue to be, subject to significant fluctuations, and has decreased significantly in recent months from historical trading levels as a result of a variety of factors, including the announcement of the acquisition of AFF, the CFPB’s action against the Company and other factors, some of which are beyond the Company’s control.

The Company may fail to meet the expectations of its stockholders or securities analysts at some point in the future, and its stock price could decline further as a result.

The ongoing COVID-19 pandemic and government stimulus programs in response thereto has adversely impacted, and any material worsening thereof or other health related emergency could continue to impact, the Company’s business and results of operations.

While the level of disruption caused by, and the economic impact of, the COVID-19 pandemic lessened in 2022, there is no assurance that the pandemic will not worsen again, included as a result of the emergence of new strains of the virus, or another health-related emergency will not emerge.

Any worsening of the pandemic, a new health-related emergency and their effects on the economy could further impact consumer, business, and government spending as well as customer demand for pawn loans and the Company’s retail finance products on an ongoing basis, each of which could adversely impact its business and operations in future periods.

The price of the Company’s common stock may fluctuate significantly.

The market price of the Company’s common stock price may fluctuate significantly as a result of a variety of factors, many of which are beyond the Company’s control.

The Company may fail to meet the expectations of its stockholders or securities analysts at some point in the future and its stock price could decline as a result.

This volatility may prevent investors from being able to sell their common stock at or above the price they paid for their common stock.

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Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities.

Due to the impact of the announcement of the CFPB’s action on the Company’s stock price, the Company has become subject to a purported securities class action related to the CFPB’s lawsuit and may become subject to further litigation.

Following the announcement of the CFPB’s action, the Company has become subject to a purported securities class action and derivative litigation related to the CFPB’s lawsuit and may become subject to further litigation.

An unfavorable result in these matters could have a material impact on the Company’s financial condition and results of operations.

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Losses not covered by insurance could be substantial and may increase the Company’s expenses, which could harm the Company’s results of operations and financial condition.

Furthermore, the frequency and severity of these weather events and natural disasters may increase as a result of climate change.

Climate change could adversely affect the Company’s business and damage its reputation.

Concerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts around the world to mitigate those impacts.

Consumers and businesses are also changing their behavior and business preferences as a result of these concerns.

New governmental regulations or guidance relating to climate change, as well as changes in consumers’ and businesses’ behaviors and business preferences, may affect whether and on what terms and conditions the Company will engage in certain activities or offer certain products or services.

The governmental and supervisory focus on climate change could also result in the Company becoming subject to new or heightened regulatory requirements.

Any such new or heightened requirements could result in increased regulatory, compliance or other costs.

The Company’s business, reputation and ability to attract and retain employees may also be harmed if the Company’s response to climate change is perceived to be ineffective or insufficient.

Adverse real estate market fluctuations and/or the inability to renew and extend store operating leases could affect the Company’s profits.

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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