Atlanticus Holdings

None of the warning signs we check for were found.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 12 Mar 2026, plus the 10-Q filed 6 Aug 2026 and 2 later 8-Ks.

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• Failure to realize the expected benefits of our acquisition of Mercury could adversely affect our business and the value of our securities.

  Could happen

  • • • • • • If we do not successfully manage these risks and the other challenges inherent in integrating an acquired business, then we may not achieve the anticipated benefits of the acquisition of Mercury on our anticipated timeframe or at all and our revenue, expenses, operating results, financial condition and the prices of our securities could be materially adversely affected. The successful integration of the Mercury business will require significant management attention and may divert it from our business and operational issues.

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• Because we outsource account-processing functions that are integral to our business, any disruption or termination of these outsourcing relationships could harm our business. We generally outsource account and payment processing. If these outsourcing relationships were not renewed or were terminated or the services provided to us were otherwise disrupted, we would have to obtain these services from alternate providers. There is a risk that we would not be able to enter into similar outsourcing arrangements with alternate providers on terms that we consider favorable or in a timely manner without disruption of our business.

  Could happen

  Recently, the financial services industry has experienced rapid developments in artificial intelligence, including agentic artificial intelligence. The use of artificial intelligence models developed by third parties introduces risks related to how those models are developed, trained, and deployed, including unauthorized material in training data and limited visibility into risk mitigation steps. The legal and regulatory environment for artificial intelligence is uncertain and rapidly evolving, potentially increasing compliance costs and risks of noncompliance. We may be exposed to the risk that generative artificial intelligence models may produce incorrect outputs, release confidential information, reflect biases, or otherwise cause harm. Their complexity may make it challenging to understand all outputs and comply with documentation or explanation requirements. Any of these risks could adversely affect our business, expose us to liability or other adverse legal or regulatory consequences, or otherwise adversely affect our financial results.

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• The FDIC has issued guidance affecting the banks that utilize our technology platform to market general purpose credit cards and certain other credit products and these or subsequent new rules and regulations could have a significant impact on such credit products. The banks that utilize our technology platform and other services to market general purpose credit cards and certain other credit products are supervised and examined by both the state that charters them and the FDIC. If the FDIC or a state supervisory body considers any aspect of the products originated utilizing our technology platform to be inconsistent with its guidance, the banks may be required to alter or terminate some or all of these products.

  Could happen

  In addition, the current regulatory environment could be impacted by future legislative developments that significantly impact financial services companies like ours. For example, in February and March 2025, bipartisan legislation was introduced in both the United States Senate and House, respectively, seeking to amend the Truth in Lending Act (“TILA”) to cap credit card interest rates at 10% effective January 1, 2031. Thereafter, in January 2026, the current presidential administration proposed a 10% cap on credit card interest rates for one year. Additional bills have been introduced in Congress in 2026 that seek to cap interest rates in other ways, such as US S3721, which would amend TILA to cap interest rates on all consumer credit products at the maximum amount permitted in the state where the customer resides, and US S3793, which would extend the Military Lending Act’s 36% military annual percentage rate cap and related protections to all consumers in connection with all consumer credit products subject to only limited exceptions for residential mortgages, certain secured auto loans, and federal credit unions. Any temporary or permanent implementation of a specific interest rate cap on consumer credit cards or more broadly across all consumer credit products could have a material adverse effect on our business and operations. New laws and regulations such as these could significantly lower or eliminate the profitability of operations going forward by, among other things, reducing the amount of interest and fees we charge in connection with any financial products that are offered or otherwise available to consumers.

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• Regulation in the areas of privacy and data security could increase our costs. We are subject to various regulations related to privacy and data security/breach, and we could be negatively impacted by these regulations. For example, we are subject to the Safeguards guidelines under the Gramm-Leach-Bliley Act. The Safeguards guidelines require that each financial institution develop, implement and maintain a written, comprehensive information security program containing safeguards that are appropriate to the financial institution’s size and complexity, the nature and scope of the financial institution’s activities and the sensitivity of any customer information at issue. Broad-ranging data security laws that affect our business also have been adopted by several states.

  Could happen

  There is an increasing focus by legislators, courts and regulators regarding the collection, use and sharing of data by websites, including the CCPA. Recent and evolving interpretations of existing state laws, including existing wiretapping laws such as the California Invasion of Privacy Act, have expanded to include the use of cookies, pixels and third-party ad-tracking technologies, and which may carry statutory penalties. This may result in potential exposure relating to our use of technology and our implementation of related safeguards.

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