NICK Nicholas Financial Inc.

Risks

• The extent to which COVID-19 and measures taken in response thereto impact our business, results of operations and financial condition will depend on future developments, which are highly uncertain and are difficult to predict. COVID-19 has had and is likely to continue to have a material adverse impact on our results of operations and financial condition and heightens many of our known risks.
• We operate in an increasingly competitive market.
• If we fail to maintain an effective system of internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately and timely report our financial results, which could lead to a loss of investor confidence in our financial statements and have an adverse effect on our stock price.
• Uncertainty about the continuing availability of LIBOR may adversely affect our business.
• On October 5, 2017, the CFPB released the final rule Payday, Vehicle Title and Certain High-Cost Installment Loans under the Dodd Frank Act, which as adopted could potentially have a material adverse effect on our operations and financial performance.
• The CFPB has broad authority to pursue administrative proceedings and litigation for violations of federal consumer financing laws.
• Pursuant to the authority granted to it under the Dodd-Frank Act, the CFPB adopted rules that subject larger nonbank automobile finance companies to supervision and examination by the CFPB. Any such examination by the CFPB likely would have a material adverse effect on our operations and financial performance.
• We are subject to many other laws and governmental regulations, and any material violations of or changes in these laws or regulations could have a material adverse effect on our financial condition and business operations.
• The loss of our key executives could have a material adverse effect on our business.
• We are subject to risks associated with litigation.
• We depend upon our relationships with our dealers.
• Our success depends upon our ability to implement our business strategy.
• The auction proceeds we receive from the sale of repossessed vehicles and other recoveries are subject to fluctuation due to economic and other factors beyond our control.
• An increase in market interest rates may reduce our profitability.
• Failure to properly safeguard confidential customer information could subject us to liability, decrease our profitability, and damage our reputation.
• Our growth depends upon our ability to retain and attract a sufficient number of qualified employees.
• Our stock is thinly traded, which may limit your ability to resell your shares.
• Natural disasters, acts of war, terrorist attacks and threats, or the escalation of military activity in response to these attacks or otherwise may negatively affect our business, financial condition, and results of operations.