What changed in this filing

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Item 1A. Risk Factors

2026-02-09 compared with 2025-02-03 · 132 added, 151 removed, 353 unchanged (44% of the section changed)

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

• The Company faces significant competition from other pawnshops, branch-based consumer lenders, banks, credit unions, online lenders, POS consumer finance companies, LTO companies, general, specialty and online retailers, governmental entities and other organizations offering similar financial services and retail products to those offered by the Company.

• The Company faces significant competition from other pawnshops, branch-based consumer lenders, online consumer lenders, banks, credit unions, POS consumer finance companies, LTO companies, buy-now/pay later (“BNPL”) providers along with general, specialty and online 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 changes could adversely affect the Company’s results of operations.

• The Company’s future success is largely dependent upon the ability of its management team to successfully execute its business strategy and drive organic growth.

• The inability to successfully identify attractive acquisition targets, realize administrative and operational synergies and integrate completed acquisitions could adversely affect results.

• The inability to successfully identify attractive acquisition targets, realize anticipated benefits from and integrate completed acquisitions could adversely affect results.

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

• Security breaches, cyber attacks or fraudulent activity could result in damage to the Company’s operations or lead to reputational damage and could expose the Company to significant liabilities.

• The Company’s future growth is dependent on its ability to keep pace with technological advances, including the adoption of generative artificial intelligence and other machine learning technologies, to remain competitive.

• The Company’s businesses are typically subject to seasonality, which causes the Company’s revenues and operating cash flows to fluctuate.

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

• Changes impacting international trade, such as proposed or enacted tariffs, including pursuant to policies of the incoming U.S.

• Changes impacting international trade, such as proposed or enacted tariffs, including pursuant to policies of the current U.S.

administration, and corporate taxation and other related regulatory provisions may have an adverse effect on the Company’s financial condition and results of operations.

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

• 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 all consumer finance companies that serve credit-constrained consumers, including the Company, face increasing regulatory scrutiny under the current regulatory environment.

• The Company’s products and services are subject to extensive regulation and supervision under various federal, state and local laws, ordinances and regulations in the U.S., Latin America and the U.K., and all consumer finance and lease-to-own companies that serve credit-constrained consumers, including the Company, face increasing regulatory scrutiny under the current 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.

• The Company is the subject of a lawsuit initiated by the CFPB alleging (1) violations of the MLA and (2) violations of a consent order the Company’s predecessor entered into with the CFPB.

• If the bank partner loan origination model used by AFF is successfully challenged or deemed impermissible, AFF could be found to be in violation of licensing, interest rate limit, lending or brokering laws and could face penalties, fines, a determination that certain of the loans are void or voidable, litigation or regulatory enforcement.

• Media reports, statements made by regulators and elected officials and the general public perception that pawnshops, LTO and retail finance products for credit-constrained consumers are predatory or abusive could have a material adverse effect on the Company’s businesses.

• Current and future litigation or regulatory proceedings, both in the U.S.

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

• Current and future litigation or regulatory proceedings, in the U.S., Latin America and the U.K., 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 and exposes the Company to reputational and litigation risk if such firearms, ammunition and related accessories lead to deaths, injuries or are utilized in the commission of a crime.

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• 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.

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

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

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• If the AFF business is unable to collect on its leases, RISAs and bank loans, the performance of its lease and finance receivables portfolio would be adversely affected.

Strategic and Business Risks

Increased competition from other pawnshops, POS 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 lenders, banks, credit unions, credit card issuers, online lenders, POS consumer finance companies, LTO companies, general, specialty and online retailers, governmental entities and other organizations offering similar financial services and retail products to those offered by the Company.

Competition from other pawnshops, POS consumer finance and BNPL 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 lenders, banks, credit unions, credit card issuers, online lenders, POS consumer finance and BNPL companies, LTO companies, general, specialty and online retailers, governmental entities and other organizations offering similar financial services and retail products to those offered by the Company.

In addition, banks, credit card issuers, consumer finance companies and retailers continue to develop and enhance lending and retail POS payment products and services designed to compete for the credit-constrained customer, many of which have greater financial resources and brand recognition than the Company.

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These factors and circumstances could adversely affect the Company’s ability to grow.

The success of the Company’s organic expansion strategy is subject to numerous external factors, including regulatory restrictions, general economic conditions and acceptance of the Company’s products.

The success of the Company’s organic expansion strategy is subject to many external factors, including regulatory restrictions, general economic conditions and acceptance of the Company’s products.

With respect to the Company’s pawn business, organic growth is largely driven by the ability to increase the productivity of its existing stores and successfully open new stores, which new store openings are impacted by the availability of sites with favorable customer demographics, limited competition from other pawn stores, community acceptance, suitable lease terms, its ability to attract, train and retain qualified associates and management personnel, the ability to obtain required government permits and licenses and the ability to complete construction and obtain utilities in a timely manner.

With respect to the AFF business, organic growth is largely driven by the ability of AFF to expand its network of merchant partners, increase utilization of its products at its merchant partners and improve its technology to support increased growth, meet the needs of its merchants and consumers and make effective approval decisions with respect to its products.

Some of these factors are beyond the Company’s control.

The failure to execute the Company’s organic expansion strategy would adversely affect the Company’s ability to expand its business and could materially adversely affect its business, prospects, results of operations and financial condition.

The inability to successfully identify attractive acquisition targets, realize administrative and operational synergies and integrate completed acquisitions could adversely affect results.

The inability to successfully identify attractive acquisition targets, realize anticipated benefits from and integrate completed acquisitions could adversely affect results.

The Company has historically grown in large part through strategic acquisitions, and the Company’s strategy is to continue to pursue attractive acquisition opportunities if and when they become available.

The success of an acquisition is subject to numerous internal and external factors, such as competition rules, the ability to consolidate information technology and accounting functions, the management of additional sales, administrative, operations and management personnel, overall management of a larger organization, competitive market forces, and general economic and regulatory factors.

It is possible that the integration process could result in unrealized administrative and operational synergies, the loss of key employees, the disruption of ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect the Company’s ability to maintain relationships with customers, employees, or other third parties or the Company’s ability to achieve the anticipated benefits of such acquisitions and could harm its financial performance.

and could harm its financial performance.

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.

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.

Failure to successfully integrate an acquisition could adversely affect 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 carries the risk that the Company may not realize a return on the acquisition or the Company’s investment.

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The Company depends on its senior management to execute its business strategy and oversee its operations.

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, 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 member 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.

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

Furthermore, H&T’s and AFF’s senior management teams provide the Company with significant experience with the U.K.

pawn market and retail POS payment solutions industry, respectively.

The loss of services of any member of the Company’s senior 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 hourly retail employees along with supervisory employees, while AFF relies heavily on sales, information technology, data science and customer service employees.

The Company’s pawn businesses rely 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 Company’s business depends highly upon its ability to perform, in an efficient and uninterrupted fashion, necessary business functions such as operating, managing and securing its retail locations, technical support centers, security monitoring, treasury and accounting functions and other administrative support functions.

Additionally, the Company’s storefront operations depend on the efficiency and reliability of the Company’s proprietary pawn POS and loan management system and AFF depends on its systems to process its transaction volume and effectively take applications, decision and service its customers.

Additionally, the Company’s storefront operations depend on the efficiency and reliability of the Company’s proprietary pawn POS and loan management systems and AFF depends on its systems to process its transaction volume and effectively take applications, decision and service its customers.

Furthermore, third parties provide a number of key components necessary to the Company’s business functions and systems.

Any problems caused by these third parties could adversely affect the Company’s ability to deliver products and services to its customers and otherwise conduct its business.

A shut-down of or inability to access these systems due to a power outage, a cyber-security breach or attack, a breakdown or failure of one or more of its information technology, telecommunications or other systems, or sustained or repeated disruptions of such systems could significantly impair its ability to perform such functions on a timely basis and could result in a deterioration of the Company’s ability to perform its day-to-day operations, provide customer service or perform other necessary business functions.

A shut-down of or inability to access these systems due to a power outage, a cybersecurity breach or attack, a breakdown or failure of one or more of its information technology, telecommunications or other systems, or sustained or repeated disruptions of such systems could significantly impair its ability to perform such functions on a timely basis and could result in a deterioration of the Company’s ability to perform its day-to-day operations, provide customer service or perform other necessary business functions.

Security breaches, cyber attacks or fraudulent activity could result in damage to the Company’s operations or lead to reputational damage and expose the Company to significant liabilities.

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 with customers.

While the Company’s pawn business has historically acquired and maintained minimal personal information (primarily name, address, government identification numbers 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.

While the Company’s pawn business has historically acquired and maintained minimal personal information (primarily name, address, government identification numbers 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.

These security incidents and cyber attacks may be in the form of computer hacking, acts of vandalism or theft, malware, computer viruses or other malicious codes, phishing, employee error or malfeasance, catastrophes or unforeseen events or other cyber attacks.

A security breach of the Company’s computer systems, or those of the Company’s third-party service providers, including as a result of cyber attacks, could cause loss of Company assets, sensitive customer information and transaction data, interrupt or damage its operations or harm its reputation.

A security breach of the Company’s computer systems, or those of the Company’s third-party service providers, including as a result of cyber attacks, could cause loss of Company assets, sensitive customer or employee information, transaction data, interrupt or damage its operations or harm its reputation.

In addition, the Company could be subject to liability if confidential customer or employee information is misappropriated from its computer systems.

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Additionally, the regulatory environment related to information security and data collection, retention, use and privacy is increasingly rigorous, with new and constantly changing requirements applicable to the Company’s business, and compliance with those requirements could result in additional costs, such as increased investment in technology or investigative expenses, the costs of compliance with privacy laws, and fines, penalties and costs incurred to prevent or remediate information security or cyber breaches.

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

For example, the GDPR imposes strict data protection requirements and significant penalties for

noncompliance.

Furthermore, various regulators and regulations require notice of any data security breaches that involve personal information.

These mandatory disclosures 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.

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Lastly, the Company’s cyber and other insurance policies carry retention and coverage limits, which may not be adequate to reimburse for losses caused by security breaches, and the Company may not be able to collect fully, if at all, under these insurance policies.

Because the Company maintains a significant supply of cash, loan collateral and inventories in its pawn stores and certain processing centers, the Company may be subject to employee and third-party robberies, riots, looting, burglaries and thefts.

The Company’s future growth is dependent on its ability to keep pace with the adoption of technological advances, including generative artificial intelligence and other machine learning technologies, to remain competitive.

The Company’s industry is marked by rapid technological developments and innovations, such as the use of artificial intelligence and machine learning, to conform to evolving industry standards.

The Company may be required to make significant investments in its information technology systems, including those related to artificial intelligence and machine learning, in order to maintain its competitive position in the market.

If the Company is unable to provide enhancements and new features and integrations for its existing products, develop new products that achieve market acceptance, or innovate quickly enough to keep pace with these rapid technological developments, its business could be harmed.

Furthermore, the technical challenges associated with developing this technology may be significant, leading to risk of equipment failures, customer disruptions, or vulnerabilities that could compromise the integrity, security, or privacy of certain customer information.

These failures could result in reputational damage, legal liabilities, or loss in customer confidence.

Moreover, transitioning to these new or upgraded systems or technological developments requires significant capital investments and personnel resources.

Implementation is also highly dependent on the coordination of numerous associates, contractors and software and system providers.

If the Company’s information technology systems, upgrades and associated change management are not adequate to support its business and its strategic initiatives, the Company’s financial condition and results of operations could be adversely affected, and its business may become less competitive.

Because the Company maintains a significant supply of cash, pawn loan collateral and retail inventories in its pawn stores and certain processing centers, the Company may be subject to employee and third-party robberies, riots, looting, burglaries and thefts.

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

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The Company could also experience liability or adverse publicity arising from such crimes.

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

Any such event may have a material and adverse effect on the Company’s business, prospects, results of operations and financial condition.

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 POS 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.

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

While the Company intends to vigorously protect its trademarks and proprietary systems against infringement, it may not be successful.

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The Company’s operations and cash management are dependent upon the Company’s ability to maintain retail banking services, treasury management services and borrowing relationships with commercial banks.

Actions by federal regulators in the U.S.

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.

Certain banks have made strategic decisions to limit or restrict branch-based cash handling services.

Additionally, actions by federal regulators in the U.S., Latin American countries where the Company operates and the U.K.

have caused some 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 and sales, data and voice networks and other information technology products and services.

The failure or inability of any of these third-party financial institutions or vendors to provide such services could limit the Company’s ability to grow its business and could increase the Company’s costs of doing business, which could adversely affect the Company’s operations if the Company is unable to timely replace them with comparable service providers at a comparable cost.

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The Company’s risk management efforts may not be effective.

The Company could incur substantial losses and its business operations could be disrupted if the Company is unable to effectively identify, manage, monitor and mitigate financial risks, such as credit risk, interest rate risk, prepayment risk, liquidity risk and other market-related risks, as well as regulatory and operational risks related to its business, assets and liabilities.

The Company could incur substantial losses and its business operations could be disrupted if the Company does not effectively identify, manage, monitor and mitigate financial risks, such as credit risk, interest rate risk, commodity pricing risk, prepayment risk, liquidity risk and other market-related risks, as well as regulatory and operational risks related to its business, assets and liabilities.

The Company’s risk management policies, procedures and techniques may not be sufficient to identify all of the risks it is exposed to, mitigate the risks the Company has identified or identify concentrations of risk or additional risks to which the Company may become subject in the future.

Regulatory, Legislative and Legal Risks

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.

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

If changes in regulations affecting the Company’s pawn business or the AFF business create increased restrictions, or have the effect of prohibiting pawn loans or POS payment products in the jurisdictions where the Company currently operates, such regulations could materially impair or reduce the Company’s business and limit its expansion into new markets.

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.

Federal and state regulatory authorities are increasingly focused on consumer finance and retail POS payment products, such as those offered by the Company, for credit-constrained consumers.

The Company faces the risk that restrictions or limitations on pawn loans and retail POS payment products resulting from the enactment, change, interpretation or enforcement of laws and regulations in the U.S.

or Latin America could have a negative effect on the Company’s business activities.

could have a negative effect on the Company’s business activities.

For example, certain states have capped interest rates on consumer loans at 36% and there has been legislation proposed at the federal level and in other states to implement a comparable cap on interest rates on consumer loans.

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State, local and federal governmental agencies have imposed sanctions on originators for practices including, but not limited to, charging borrowers excessive fees, steering borrowers to loans with higher costs or more onerous terms, imposing higher interest rates than the borrower’s credit risk warrants, failing to adequately disclose the material terms of loans to the borrowers and otherwise engaging in discriminatory lending practices or unfair, deceptive or abusive acts or practices.

Donald Trump became president on January 20, 2025, and at this juncture, it is unclear whether a new CFPB Director appointed by the Trump Administration will be less aggressive in its regulatory and enforcement approach.

In addition to the specific laws described above, it is anticipated that the Trump administration will promulgate a number of executive orders and propose legislation that could directly impact the regulation of the financial services industry.

These orders and legislation could change banking statutes and our operating environment in substantial and unpredictable ways by increasing or decreasing the cost of doing business, limiting or expanding permissible activities, or affecting the competitive balance among financial institutions.

Consequently, 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.

In particular, with respect to the Company’s pawn business, restrictions and regulations such as licensing requirements for pawn stores and their employees, customer identification requirements, suspicious activity reporting, disclosure requirements and limits on interest rates, loan service fees, or other fees have been and continue to be proposed.

Adoption of such federal, state or local regulation or legislation in the U.S.

and Latin America could restrict, or even eliminate, the availability of pawn transactions and buy/sell agreements at some or all of the Company’s locations, which would adversely affect the Company’s operations and financial condition.

Adoption of such federal, state or local regulation or legislation in the U.S., Latin America and the U.K.

could restrict, or even eliminate, the availability of pawn transactions and buy/sell agreements at some or all of the Company’s locations, which would adversely affect the Company’s operations and financial condition.

In addition, certain aspects of the AFF business, such as the content of its advertising and other disclosures to customers about transactions, its collection practices, the manner in which AFF contacts its customers, the decisioning process regarding whether to enter into a transaction with a potential customer, its credit reporting practices and the manner in which it processes and stores certain customer, employee and other information are subject to federal and state laws and regulatory oversight.

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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.

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 .

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

and Cash America West, Inc., and later amended the complaint to include numerous Company subsidiaries as defendants.

The CFPB lawsuit alleges violations of the MLA in connection with pawn transactions.

The CFPB also alleges that these same alleged violations of the MLA constitute breaches of a 2013 CFPB consent order entered into by the Company’s predecessor that, among other things, allegedly required such predecessor company and its successors to cease and desist from further MLA violations.

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

After an initial period of pre-trial activity, the case was stayed on November 4, 2022, pending the Supreme Court review of the Fifth Circuit's decision in Community Financial v.

CFPB , where the Fifth Circuit held the CFPB’s funding mechanism was unconstitutional and its actions were void.

The Supreme Court reversed that decision through an opinion issued on May 16, 2024.

The stay of the CFPB case was lifted, and active litigation ensued.

On November 7, 2024, the District Court denied the Company’s motion for partial summary judgement.

The District Court has also ordered the parties to mediation.

After an initial session, the mediation is currently postponed pending the anticipated leadership transition at the CFPB.

Unless resolved by agreement, the Company intends to vigorously defend the action.

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 result in increased operational costs and could 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 became the subject to a purported shareholder class action and derivative action related to the CFPB’s lawsuit.

While both the securities class action and derivative action

have been dismissed, there is no guarantee that the Company will not become subject to future securities litigation related to the CFPB lawsuit, including in the event of an adverse outcome in the CFPB lawsuit.

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.

These orders and legislation could change applicable statutes and the Company’s operating environment in substantial and unpredictable ways by increasing or decreasing the cost of doing business, limiting or expanding permissible activities, or affecting the competitive balance among financial services institutions.

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

The FDIC has issued examination guidance affecting AFF’s unaffiliated third-party lender and these or subsequent new rules and regulations could have a significant impact on AFF’s Bank-originated products.

The installment loans are originated by the Bank using technology and marketing services provided by AFF.

The Bank is supervised and examined by both the State of Utah, which charters the Bank, and the FDIC.

If the FDIC or the Utah Department of Financial Institutions considers any aspect of the Bank-originated products to be inconsistent with its guidance, the Bank may be required to alter or discontinue the product.

On July 29, 2016, the board of directors of the FDIC released examination guidance relating to third-party lending, which, if finalized, would apply to all FDIC-supervised institutions that engage in third-party lending programs, including certain bank products.

The proposed guidance elaborates on previously-issued agency guidance on managing third-party risks and specifically addresses third-party lending arrangements where an FDIC-supervised institution relies on a third party to perform one or more significant aspects of the lending process.

The types of relationships that would be covered by the guidance include (but are not limited to) relationships for originating loans on behalf of, through or jointly with third parties, or using platforms developed by third parties.

If adopted as proposed, the guidance would result in increased supervisory attention of institutions that engage in significant lending activities through third parties, including at least one examination every 12 months, as well as supervisory expectations for a third-party lending risk management program and third-party lending policies that contain certain minimum requirements, such as self-imposed limits as a percentage of total capital for each third-party lending relationship and for the overall loan program, relative to origination volumes, credit exposures (including pipeline risk), growth, loan types, and acceptable credit quality.

While the guidance has never formally been adopted, it is the Company’s understanding that the FDIC has relied upon it in its examination of third-party lending arrangements.

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

Loans originated through the Bank’s program accounted for 3% of the Company’s consolidated net revenues during 2024 .

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 and fees and disclosures.

In the event of such a challenge or if AFF’s 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 contracted interest rates, licensing violations, loans deemed 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.

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.

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

In recent years, consumer advocacy groups and some media reports, in both the U.S.

and Latin America, have advocated governmental action to prohibit or place severe restrictions on the Company’s products and services.

In recent years, consumer advocacy groups and some media reports, in the U.S., Latin America and the U.K., have advocated governmental action to prohibit or place severe restrictions on the Company’s products and services.

Reports and statements made by consumer advocacy groups, members of the media, regulators and elected officials often focus on the annual or monthly cost to a consumer of pawn, LTO and certain retail finance transactions, which are higher than the interest typically charged by banks to consumers with better credit histories.

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If the negative characterization of the Company’s businesses becomes increasingly accepted by consumers, demand for its products could significantly decrease, which could materially affect the Company’s results of operations and financial condition.

Additionally, if the negative characterization of these types of transactions becomes increasingly accepted by legislators and regulators, the Company could become subject to more restrictive laws and regulations that could have a material adverse effect on the Company’s financial condition and results of operations.

Additionally, if the negative characterization of these types of transactions becomes

increasingly accepted by legislators and regulators, the Company could become subject to more restrictive laws and regulations that could have a material adverse effect on the Company’s financial condition and results of operations.

Furthermore, any negative public perception of pawnshops generally would also likely have a material negative impact on the Company’s retail operations, including reducing the number of consumers willing to shop at the Company’s stores.

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

Current and future litigation or regulatory proceedings, both in the U.S.

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

The Company or its subsidiaries has been, is, or may become involved in lawsuits, arbitration claims (including mass arbitrations);

regulatory or administrative proceedings;

examinations;

investigations;

consent orders;

memorandums of understanding;

other actions arising in the ordinary course of business, including those related to consumer financial protection, federal or state wage and hour laws, product liability, unclaimed property, employment, personal injury;

and other matters that could cause it to incur substantial expenditures and generate adverse publicity.

Current and future litigation or regulatory proceedings in the U.S., Latin America and the U.K.

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

The Company or its subsidiaries has been, is, or may become involved in lawsuits, arbitration claims (including mass arbitrations), regulatory or administrative proceedings, examinations, investigations, consent orders, memorandums of understanding, audits, other actions arising in the ordinary course of business, including those related to consumer financial protection, federal or state wage and hour laws, product liability, unclaimed property, employment, personal injury, and other matters that could cause it to incur substantial expenditures and generate adverse publicity.

In particular, the Company may be involved in lawsuits, arbitration claims 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.

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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 redeems a pawned firearm that is later involved in a shooting or other crime.

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.

pawn locations, the Company is required to comply with U.S.

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 redeems a pawned firearm that is later involved in a shooting or other crime.

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

If enacted, new laws and regulations could limit the types of licenses, firearms, ammunition and certain related accessories that the Company is permitted to purchase and sell and could impose new restrictions and requirements on the manner in which the Company pawns, offers, purchases and sells these products, which could have a material adverse effect on the Company’s business, prospects, results of operations and financial condition.

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The Company is subject to the FCPA, which generally prohibits companies and their agents or intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business and/or other benefits.

The Company is also subject to anti-money laundering laws in both the United States and Latin America and anti-terrorism financing laws and regulations, including the Bank Secrecy Act and the Patriot Act .

The Company is also subject to anti-money laundering laws in the U.S., Latin America and the U.K.

and anti-terrorism financing laws and regulations, including the Bank Secrecy Act and the Patriot Act .

Furthermore, AFF is required under its agreements with its originating bank partner to maintain an enterprise-wide program designed to enable it to comply with all applicable anti-money laundering and anti-terrorism financing laws and regulations, including the Bank Secrecy Act and the Patriot Act.

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or foreign authorities could harm the Company’s reputation and could have a material adverse effect on its business, results of operations and financial condition.

Failure to maintain certain criteria required by state and local regulatory bodies could result in fines or the loss of the Company’s licenses to conduct business.

Most states and many local jurisdictions, both in the U.S.

and in Latin America, in which the Company operates require registration and licenses of stores and employees to conduct the Company’s business.

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.

Failure to maintain certain criteria required by various federal, state and local regulatory bodies could result in fines or the loss of the Company’s licenses to conduct business.

The Company’s pawn businesses are subject to significant registration and licensing requirements from various federal, state and municipal governmental entities in the U.S., Latin America and the U.K.

Many of these regulatory bodies require registration and licenses of stores and employees to conduct the Company’s business and 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.

From time to time, the Company is subject to audits in various states to ensure it is meeting the applicable requirements to maintain the applicable licenses and registrations.

From time to time, the Company is subject to audits in various jurisdictions to ensure it is meeting the applicable requirements to maintain the applicable licenses and registrations.

Failure to meet the Company’s legal compliance requirements could result in substantial fines and penalties, store closures, the temporary or permanent suspension of operations, the revocation of existing licenses and/or the denial of new and renewal licensing requests.

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Foreign Operations Risks

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 financial position and results of operations may change significantly due to fluctuations in currency exchange rates in Latin American and U.K.

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

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.

While the Company’s consolidated financial statements are reported in U.S.

dollars, the financial statements of the Company’s Latin American subsidiaries are prepared using their respective functional currency and translated into U.S.

dollars, the financial statements of the Company’s foreign subsidiaries are prepared using their respective functional currency and translated into U.S.

dollars by applying appropriate exchange rates.

As a result, fluctuations in the exchange rate of the U.S.

dollar relative to the Latin American currencies could cause significant fluctuations in the value of the Company’s assets, liabilities, stockholders’ equity and operating results.

dollar relative to the foreign currencies could cause significant fluctuations in the value of the Company’s assets, liabilities, stockholders’ equity and operating results.

In addition, while expenses with respect to foreign operations are generally denominated in the same currency as corresponding sales, the Company has transaction exposure to the extent expenditures are incurred 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, 2024, the Company had 1,826 pawn store locations in Latin America, including 1,725 in Mexico, 72 in Guatemala, 17 in El Salvador and 12 in Colombia, and the Company plans to open or acquire additional pawn stores in Latin America in the future.

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

Doing business in each of these countries involves increased risks related to geo-political events, political instability, corruption, economic volatility, property crime, drug cartel and gang-related violence, social and ethnic unrest including riots and looting, enforcement of property rights, governmental regulations, tax policies, banking policies or restrictions, foreign investment policies, public safety, health and security, anti-money laundering regulations, interest rate regulation and import/export regulations, among others.

As in many developing markets, there are also uncertainties as to how both local law and U.S.

As of December 31, 2025, the Company had 1,837 pawn store locations in Latin America, including 1,732 in Mexico, 75 in Guatemala, 18 in El Salvador and 12 in Colombia, and 286 stores in the U.K.

The Company plans to open or acquire additional pawn stores in Latin America and the U.K.

in the future.

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

Doing business in foreign countries, especially in Latin America, involves increased risks related to geo-political events, political instability, corruption, economic volatility, property crime, drug cartel and gang-related violence, social and ethnic unrest including riots and looting, enforcement of property rights, governmental regulations, tax policies, banking policies or restrictions, foreign investment policies, public safety, health and security, anti-money laundering regulations, interest rate regulation and import/export regulations, among others.

As in many developing markets, there are also uncertainties in the Latin American countries the Company operates in as to how both local law and U.S.

federal law is applied, including laws related to commercial transactions and foreign investment.

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Many of the foreign countries in which the Company operates impose costs on non-domestic companies through the use of local regulations, tariffs, labor controls and other federal or state requirements or legislation.

In addition, the 2024 presidential and congressional election results may have a significant impact on U.S.

domestic and global trade policies.

As the Company derives significant revenue, earnings and cash flow from operations in Latin America, primarily in Mexico, there are some inherent risks regarding the overall stability of the trading relationship between Mexico and the U.S.

and the burdens imposed thereon by any changes to (or the adoption of new) regulations, tariffs or other federal or state legislation.

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.

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.

companies operating in Mexico.

In particular, there is continued uncertainty around Mexico’s current federal administration and how the policies as applied by its administration, including conducting aggressive corporate tax and other regulatory audits, adverse government discretion, and support of increased employee minimum wages, profit sharing and benefit programs, may impact U.S.

companies doing business in Mexico generally and pawn and consumer finance companies in particular.

Any such changes in regulations, trade treaties, corporate tax policy, import taxes or adverse court or administrative interpretations of the foregoing could adversely and significantly affect the Mexican economy and ultimately the Mexican peso, which could adversely and significantly affect the Company’s financial position and results of the Company’s Latin America pawn operations.

In addition, the U.S., China, Canada, Mexico, European Union and other countries have imposed, or threatened to impose, new or enhanced tariffs, quotas, trade barriers and other restrictions on imports into their respective territories.

Numerous trade restrictions are currently in

effect and such restrictions, coupled with the risk of retaliatory steps taken in response to such restrictions, could potentially serve to depress economic activity generally in the U.S., adversely affecting consumers and contributing to general market volatility.

Furthermore, Mexico’s judiciary is undergoing a substantial overhaul via a 2024 constitutional reform, transitioning from an appointed system to one where federal judges, magistrates, and even Supreme Court justices are popularly elected by vote, starting with 2025 elections, to combat corruption but raising concerns about independence, expertise, and potential political influence from the ruling party.

Key changes include popular elections, restructuring governing bodies (replacing the Federal Judiciary Council), reducing Supreme Court size, and lowering qualifications for some judges, creating significant debate over the rule of law and stability.

There is no guarantee as to the impact these reforms may have on our Mexican operations if at all.

Accounting, Tax and Financial Risks

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, 2024, including the Company's senior unsecured notes and the Company’s unsecured credit facilities, the Company had outstanding principal indebtedness of $1,748.0 million and availability of $528.9 million under its unsecured credit facilities, subject to certain financial covenants.

As of December 31, 2025, the Company had outstanding principal indebtedness of $2,224.0 million and availability of $178.0 million under its credit facilities, subject to certain financial covenants.

The Company's level of indebtedness could:

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In such event, it is possible that the Company would not be able to satisfy its obligations under all of such accelerated indebtedness simultaneously.

Determining the AFF business’ allowance for lease and loan losses requires many assumptions and complex analyses.

If the estimates prove incorrect, the AFF business may incur net charge-offs in excess of its reserves, or may be required to increase its provision for lease and loan losses, either of which would adversely affect the Company’s results of operations.

Determining the AFF business’ allowance for lease and loan losses and liability for off-balance sheet credit exposure requires many assumptions and complex analyses.

If the estimates prove incorrect, the AFF business may incur net charge-offs in excess of its reserves or liabilities, or may be required to increase its provision for lease and loan losses, either of which would adversely affect the Company’s results of operations.

The Company’s ability to measure and report its financial position and results of operations is influenced by the need to estimate the impact or outcome of future events on the basis of information available at the time of the issuance of the financial statements.

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Management has processes in place to monitor these judgments and assumptions, but these processes may not ensure that the judgments and assumptions are correct.

The Company maintains an allowance for lease and loan losses at a level believed to be sufficient to cover estimated lifetime losses expected to be incurred in the lease and loan portfolio.

This estimate is highly dependent upon the reasonableness of its assumptions and the predictability of the relationships that drive the results of its valuation methodologies.

The Company performs a quantitative analysis to compute historical losses to estimate the allowance for future lease and loan losses.

Lease and loan loss experience, first payment default histories, contractual delinquency of lease and loan receivables and management’s judgement are factors used in assessing the overall adequacy of the allowance and the resulting provision for lease and loan losses.

Changes in estimates and assumptions can significantly affect the allowance and provision for lease and loan losses.

It is possible that the Company will experience lease and loan losses that are different from its current estimates.

If the Company’s estimates and assumptions prove incorrect and its allowance for lease and loan losses are insufficient, it may incur net charge-offs in excess of its reserves, or it could be required to increase its provision for lease and loan losses, either of which would adversely affect its results of operations.

The Company maintains an allowance for lease and loan losses and a liability for off-balance sheet credit exposure related to the OBS Loans at a level believed to be sufficient to cover estimated lifetime losses expected to be incurred.

These estimates are highly dependent upon the reasonableness of its assumptions and the predictability of the relationships that drive the results of its valuation methodologies.

The Company performs a quantitative analysis to compute historical losses to estimate the allowance for future lease and loan losses and the liability for off-balance sheet credit exposure.

Loss experience, first payment default histories, contractual delinquency of lease and loan receivables and OBS Loans and management’s judgment are factors used in assessing the overall adequacy of the allowance and liability and the resulting provision for lease and loan losses.

Changes in estimates and assumptions can significantly affect the allowance, liability and provision for lease and loan losses.

It is possible that the Company will experience losses that are different from its current estimates.

If the Company’s estimates and assumptions prove incorrect and its allowance for lease and loan losses and liability for off-balance sheet credit exposure are insufficient, it may incur net charge-offs in excess of its reserves or liability, or it could be required to increase its provision for lease and loan losses, either of which would adversely affect its results of operations.

The Company is subject to goodwill impairment risk.

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The Company’s financial results may be negatively impacted by changes in domestic or foreign tax laws, administrative interpretations of such laws and enforcement of policies, including, but not limited to, an increase in statutory tax rates, changes in allowable expense deductions, or the imposition of new withholding requirements on repatriation of foreign earnings.

The application of indirect taxes, such as sales tax, is a complex and evolving issue, particularly with respect to the LTO industry generally and AFF’s virtual and e-commerce LTO businesses more specifically.

Failure to comply with such tax provisions or a successful assertion by a jurisdiction requiring AFF to collect taxes in a location or for transactions where or for which AFF presently does not, could result in substantial tax liabilities, including those for past sales and leases, as well as penalties and interest.

In addition, if the tax authorities in jurisdictions where AFF is already subject to sales tax or other indirect tax obligations were to successfully challenge AFF’s positions, AFF’s tax liability could increase substantially.

For example, on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing broad changes to the U.S.

tax code, including modifications to corporate and international provisions, which are primarily effective for the Company beginning in 2026 and 2027.

The Company is continuing to assess OBBBA’s impact on its financial results.

In addition, various foreign taxing jurisdictions enacted local legislation formally adopting the Global Anti-Base Erosion Model Rules (“Pillar

Two”), which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development Pillar Two Framework.

The effective dates were generally January 1, 2024, and January 1, 2025 for different aspects of the rules and vary by jurisdiction.

More jurisdictions are expected to implement the model rules under local law in the future, with varying effective dates.

Additionally, OBBBA includes modifications to the international tax framework.

While the Company continues to evaluate the effect of these legislative changes as additional guidance becomes available, uncertainty remains regarding the timing and interpretation by tax authorities in affected jurisdictions.

The application of indirect taxes, such as sales and value-added taxes, is a complex and evolving issue.

Failure to comply with such tax provisions or a successful assertion by a jurisdiction requiring the Company to collect taxes in a location or for transactions where or for which the Company presently does not, could result in substantial tax liabilities as well as penalties and interest.

In addition, if the tax authorities in jurisdictions where the Company is already subject to sales tax or other indirect tax obligations were to successfully challenge the Company’s positions, the Company’s tax liability could increase substantially.

General Economic and Market Risks

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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 increased demand for pawn loans in the U.S.

The current economic environment, characterized by elevated inflation, elevated interest rates, declines in consumer confidence and uncertainty about economic stability, has increased demand for pawn loans in the U.S.

Conversely these conditions, coupled with tighter decisioning, adversely affected merchant sales volumes in certain categories and demand in general for AFF’s products in 2025.

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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 margins.

In addition, government stimulus programs, (such as the response to the COVID-19 pandemic) and increased minimum wage laws (such as the increases that have occurred in Mexico) had an adverse impact on pawn loan demand and any future stimulus programs or minimum wage increases could have a similar adverse impact.

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

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

Furthermore, a number of AFF’s legacy merchant partners operate brick-and-mortar retail locations, many of which are furniture stores which have been impacted industry-wide by sales declines in 2024.

Certain of AFF’s larger furniture-focused merchant partners have experienced lagging sales, store closures and, in some instances, including Conn’s Appliances, Inc.

and American Freight, Inc.

, bankruptcies, which has and is expected to continue to negatively impact AFF’s originations.

(“Conn’s”) and American Freight, Inc.

(“A-Freight”) , bankruptcies, which has and is expected to continue to negatively impact AFF’s originations.

In the event that AFF is not able to replace origination volume from these brick-and-mortar retailers, its transaction volume and results of operations could be materially impacted.

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Its ability to retain and grow its relationships with its merchant partners depends on the willingness of merchants to partner with AFF.

The attractiveness of AFF’s platform to merchants depends upon, among other things, the size of its consumer base, its brand and reputation, the amount of merchant premium or discounts paid or received by AFF, its ability to sustain its value proposition to merchants for customer acquisition by demonstrating higher conversion at checkout, the attractiveness to merchants of AFF’s technology and data-driven platform, services and products offered by competitors, and its ability to perform under, and maintain, its merchant agreements.

services and products offered by competitors, and its ability to perform under, and maintain, its merchant agreements.

It is also important that AFF partner with merchants with growing sales across a diverse mix of retail channels to mitigate risk associated with changing consumer spending behavior, economic conditions and other factors that may affect a particular type of merchant or industry.

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AFF does not originate or ultimately control the pricing or functionality of the loans.

The Bank makes all key decisions regarding the marketing, underwriting, product features and pricing.

The Bank makes all key decisions regarding marketing, underwriting, product features and pricing.

AFF generates revenues through the loans and through marketing and sub-servicing fees paid by the Bank.

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Furthermore, the models underlying AFF’s decisioning platform may prove in practice to be less predictive than AFF expects for a variety of reasons, including as a result of errors in constructing, interpreting or using the models or the use of inaccurate assumptions (including failures to update assumptions appropriately or in a timely manner).

potential errors or inaccuracies in AFF’s decisioning platform and models may be material and affect a significant number of transactions, which could have a material and adverse effect on AFF’s business.

The potential errors or inaccuracies in AFF’s decisioning platform and models may be material and affect a significant number of transactions, which could have a material and adverse effect on AFF’s business.

If AFF is unable to collect on its leases, RISAs and bank loans, the performance of its lease and loan portfolio would be adversely affected.

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If AFF is unable to fully collect on its leases, RISAs and bank loans, the performance of its lease and loan portfolio will be adversely affected, which could result in additional provisions for lease and loan losses and loss of revenue, cash flow and profitability.

Loans originated through the Bank’s programs accounted for 6% of the Company’s consolidated net revenues during 2025 .

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

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

The installment loans are originated by the Bank using technology and marketing services provided by AFF.

The Bank is supervised and examined by both the State of Utah, which charters the Bank, and the FDIC.

While the guidance has never formally been adopted, it is the Company’s understanding that the FDIC has relied upon it in its examination of third-party lending arrangements.

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