Table of Contents SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ of ATLANTICUS HOLDINGS CORPORATION a Georgia Corporation IRS Employer Identification No. 58-2336689 SEC File Number 0-53717 Five Concourse Parkway, S ...

Consumer Credit Access - 40% of Americans have FICO® scores below 700, representing over 100 million individuals in need of credit access [19]. - The company has serviced over $30 billion in consumer loans over more than 25 years, supporting lenders in offering inclusive financial services [21]. - The Auto Finance segment serves over 610 dealers across 32 states and two U.S. territories, achieving consistent profitability and positive cash flows [27]. Financial Performance - Total operating revenue for the year ended December 31, 2022, was $1,046,104, an increase of $302,249 (40.6%) from $743,855 in 2021 [214]. - Net income for the year ended December 31, 2022, was $134,612, a decrease of $43,177 (24.3%) from $177,789 in 2021 [214]. - Net income attributable to controlling interests to common shareholders decreased to $110,521, down $45,018 (29.0%) from $155,539 in 2021 [214]. - Total operating expenses increased to $237,469, an increase of $47,740 (25.2%) from $189,729 in 2021 [214]. - Interest expense rose to $81,851, an increase of $27,724 (51.2%) from $54,127 in 2021 [214]. - Provision for losses on loans decreased significantly to $1,252, a decrease of $35,203 (96.6%) from $36,455 in 2021 [214]. - Changes in fair value of loans and notes payable associated with structured financings recorded at fair value resulted in a loss of $577,069, an increase of $358,336 (163.8%) from $218,733 in 2021 [214]. - Salaries and benefits increased to $43,063, up $9,039 (26.6%) from $34,024 in 2021 [214]. - Card and loan servicing expenses increased to $95,428, an increase of $20,031 (26.5%) from $75,397 in 2021 [214]. - Marketing and solicitation expenses increased to $62,403, up $5,768 (10.2%) from $56,635 in 2021 [214]. Investment and Financing Strategies - The company plans to continue evaluating investments in financial assets and other businesses, as well as repurchasing debt and equity securities [18]. - The company is substantially dependent on borrowed funds to finance receivables, with all financing facilities being of finite duration and subject to financial covenants [71]. - The company may incur additional indebtedness that could affect the cash available for operations and increase debt service obligations [164]. - The Senior Notes are unsecured and effectively subordinated to any secured indebtedness, which may impact the recovery for holders of the Senior Notes in a liquidation scenario [167]. - The company may not maintain sufficient cash flow from operating activities to meet its debt service obligations, potentially leading to liquidity issues [176]. - The company may issue additional notes that could rank equally with the Senior Notes, impacting their market and trading levels [178]. Credit Quality and Risk Management - The company is actively managing credit quality and loss mitigation through dealer-specific loss reserve accounts in its Auto Finance segment [36]. - The collectability of investments in receivables is influenced by various factors, including credit selection criteria and general economic conditions, which could adversely impact financial performance [66]. - The company faces substantial competition from larger financial service and fintech companies, affecting its financial performance [53]. - Economic slowdowns are expected to increase credit losses, with higher rates of delinquencies and severity of credit losses during such periods [68]. - The company faces material uncertainty and risk regarding performance and financial results due to the ongoing impact of COVID-19, which has caused disruptions in global supply chains and significant inflation [76]. Technology and Innovation - The company utilizes AI and machine learning to enhance its underwriting process, allowing for instant credit decisions based on multiple data inputs [21]. - The company anticipates further investments in Artificial Intelligence (AI) to enhance customer service and collections [45]. - The collections process has evolved to utilize digital and mobile processes, enhancing communication with consumers [38]. - The company is engaged in testing and limited investment in consumer finance technology platforms, seeking to capitalize on its expertise and infrastructure [202]. Regulatory and Compliance Issues - The company is committed to compliance with various consumer protection laws and regulations, which may impact product offerings and practices [48]. - Regulatory changes could adversely affect the ability to collect receivables and may expose the company to litigation and fines, impacting overall operations [81]. - Changes in consumer protection laws may limit fees and collection methods, adversely affecting profitability and operational practices [96]. Shareholder and Equity Information - The company issued 400,000 shares of Series A Convertible Preferred Stock in December 2019, with a 6% annual dividend on a liquidation preference of $100 per share [142]. - In June and July 2021, the company issued 3,188,533 shares of Series B Preferred Stock, with a 7.625% annual dividend on a liquidation preference of $25 per share [144]. - Holders of Series A and Series B Preferred Stock have senior rights to dividends and liquidation preferences over common stockholders [145]. - The company has the ability to issue up to 10,000,000 shares of preferred stock, with 6,344,033 shares available for future issuance [152]. - The Series B Preferred Stock ranks junior to Series A Convertible Preferred Stock and all existing and future indebtedness [152]. - The company may face liquidity risks if holders of Series A Convertible Preferred Stock exercise their redemption rights starting January 1, 2024 [143]. - The Series A Convertible Preferred Stock has anti-dilution protection, which could significantly dilute existing common stockholders if triggered [148]. - The company has not regularly paid cash dividends on common stock and plans to retain future earnings for business operations and expansion [149]. - Holders of Series B Preferred Stock have limited voting rights, primarily related to electing additional directors if dividends are in arrears [159]. - Future issuances of debt or senior equity securities may adversely affect the market price of the Series B Preferred Stock [155]. Operational Challenges - The company faces risks from rapid technological changes in financial services, which could affect its ability to compete effectively [120]. - The company relies heavily on third-party information systems, and any service interruptions could disrupt operations and damage its reputation [121]. - Increased cyber and payment fraud risks related to COVID-19 have been noted, along with challenges to the security and reliability of the company's IT platform [119]. - The company outsources account and payment processing, and any disruption in these relationships could harm its business operations [118]. - The automobile lending segment faces risks from reliance on dealer referrals and potential difficulties in obtaining funding [100][101].