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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q/A
(Amendment No. 1)
 
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2023
--12-31Q12023
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _______  to _______            
 
of
atlanticus.jpg
 
ATLANTICUS HOLDINGS CORPORATION
 
 
 
a Georgia Corporation
IRS Employer Identification No. 58-2336689
SEC File Number 0-53717
 
 
Five Concourse Parkway, Suite 300
Atlanta, Georgia 30328
(770) 828-2000
 
 
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the "Act")
  
     
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common stock, no par value per share
ATLC
NASDAQ Global Select Market
Series B Preferred Stock, no par value per share
ATLCP
NASDAQ Global Select Market
Senior Notes due 2026
ATLCL
NASDAQ Global Select Market
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer
☐
Smaller reporting company
☐
   
Emerging growth company
☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b- 2).    ☐  Yes    ☒  No
 
As of April 30, 2023, 14,464,185 shares of common stock, no par value, of Atlanticus were outstanding.
 
 
 
 
EXPLANATORY NOTE
 
This Amendment No. 1 on Form 10-Q/A (this “Amendment”) amends the original Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 filed by Atlanticus Holdings Corporation (the “Company”, “Atlanticus Holdings Corporation”, “Atlanticus”, “we”, “our”, “ours” and “us”) with the U.S. Securities and Exchange Commission (the “SEC”) on May 9, 2023 (the “Original Form 10-Q”). This Amendment does not change our consolidated financial statements as set forth in the Original Form 10-Q.
 
The purpose of this Amendment is to amend and restate Part I, Item 4 “Controls and Procedures” to reflect management’s conclusion that our disclosure controls and procedures were not effective at March 31, 2023 due to a material weakness in our internal control over financial reporting identified subsequent to the filing of our Original Form 10-Q. This material weakness did not result in any change to our consolidated financial statements as set forth in the Original Form 10-Q. As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by the Company’s principal executive officer and principal financial officer pursuant to Rule 13a-14(a) are being filed herewith as exhibits to this Amendment (Exhibits 31.1 and 31.2). Because no financial statements are contained within this Amendment, paragraph 3 of such certifications has been omitted. Additionally, a new certification of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350 is being filed herewith as an exhibit to this Amendment (Exhibit 32.1).
 
Other than the inclusion within this Amendment of new certifications required by management (and related amendment to the exhibit index to reflect the addition of such certifications), this Amendment speaks only as of the date of the Original Form 10-Q and does not modify or update any other disclosures contained in our Original Form 10-Q for other events or information subsequent to the date of the filing of the Original Form 10-Q. Specifically, there are no changes to our consolidated financial statements set forth in the Original Form 10-Q. This Amendment should be read in conjunction with the Original Form 10-Q and reports filed with the SEC subsequent to the Original Form 10-Q.
 
1
 
PART I
 
ITEM 4.
CONTROLS AND PROCEDURES
 
Evaluation of disclosure controls and procedures
 
On August 7, 2023, the Company’s management, including the principal executive officer and principal financial officer, in consultation with the Company’s independent registered public accounting firm, BDO USA, P.C. (“BDO”), determined that it was necessary for the Company to amend its prior disclosure in regards to Item 9A Controls and Procedures in the Form 10-K filed by the Company on March 15, 2023 (the “Form 10-K”). As part of the preparation of the Company’s June 30, 2023 interim financial statements, the Company’s management determined that they did not implement effective review controls and retain sufficient documentary evidence to support the precision of review over the development of cash flow forecasts used in the calculation of the fair value estimate of loans, interest and fees receivable at fair value. Thus, these controls were not operating effectively. This deficiency represents a material weakness in the Company’s internal control over financial reporting at March 31, 2023 and December 31, 2022.  A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. As a result, Management’s Report on Internal Control Over Financial Reporting included in Item 9A of the Company’s Form 10-K and BDO’s opinion relating to the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 included in the Form 10-K should no longer be relied upon. 
 
The material weakness described above did not result in a misstatement to the Company’s annual or interim consolidated financial statements.
 
Management, with the participation and supervision of our principal executive officer and our principal financial officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Act) as of March 31, 2023, the end of the period covered by the Original Form 10-Q and this Amendment. The Company’s disclosure controls and procedures are designed to ensure that information the Company is required to disclose in reports that it files or submits under the Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.  Based on such evaluation, our principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2023 because of the material weakness described above.
 
Notwithstanding this material weakness, management has concluded that no material misstatements exist in the consolidated financial statements as filed in the Original Form 10-Q and such financial statements present fairly, in all material respects, our financial position as of March 31, 2023 and December 31, 2022, and the results of operations and cash flows for the three months ended March 31, 2023 and March 31, 2022, in conformity with accounting principles generally accepted in the United States. Accordingly, there are no changes to the Company’s previously-reported consolidated financial statements.
 
Remediation Plan
 
The Company’s management is committed to maintaining a strong internal control environment. In response to the material weakness identified above, management, with the oversight of the Audit Committee of the Board of Directors, evaluated the material weakness described above and designed a remediation plan to enhance the Company’s internal control environment. To remediate the material weakness, the Company’s management performed an evaluation of the relevant controls, and implemented procedures to enhance documentation, and retain incremental evidence that supports the effectiveness of controls related to the development and review of cash flow forecasts used in the calculation of the fair value estimate of loans, interest and fees receivable, at fair value. These enhanced procedures were implemented as of June 30, 2023, and will be monitored for effectiveness.
 
Changes in internal control over financial reporting
 
There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Act) during the quarter ended March 31, 2023, that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
 
Inherent limitation on the effectiveness of internal controls
 
The Company’s management, including its principal executive officer and principal financial officer, do not expect that the Company’s disclosure controls and procedures or the Company’s internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
 
2
 
 
 
ITEM 6.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
 
Exhibit
Number
  
Description of Exhibit
  
Incorporated by Reference from Atlanticus’ SEC Filings Unless Otherwise Indicated
31.1
    
Filed herewith
31.2
    
Filed herewith
32.1
    
Filed herewith
101.INS
  
Inline XBRL Instance Document
  
May 9, 2023, Form 10-Q, exhibit 101.INS
101.SCH
  
Inline XBRL Taxonomy Extension Schema Document
   May 9, 2023, Form 10-Q, exhibit 101.SCH
101.CAL
  
Inline XBRL Taxonomy Extension Calculation Linkbase Document
   May 9, 2023, Form 10-Q, exhibit 101.CAL
101.LAB
  
Inline XBRL Taxonomy Extension Label Linkbase Document
   May 9, 2023, Form 10-Q, exhibit 101.LAB
101.PRE
  
Inline XBRL Taxonomy Presentation Linkbase Document
   May 9, 2023, Form 10-Q, exhibit 101.PRE
101.DEF
  
Inline XBRL Taxonomy Extension Definition Linkbase Document
   May 9, 2023, Form 10-Q, exhibit 101.DEF
104
  
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
   Filed herewith
 
 
3
 
SIGNATURES
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
Atlanticus Holdings Corporation
  
     
       
November 8, 2023
By:
/s/ William R. McCamey
  
   
William R. McCamey
Chief Financial Officer
(duly authorized officer and principal financial officer)
  
 
 
4

Exhibit 31.1

CERTIFICATIONS

 

I, Jeffrey A. Howard, certify that:

 

1. I have reviewed this Report on Form 10-Q/A of Atlanticus Holdings Corporation;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report; and

 

3. RESERVED.

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the fourth fiscal period in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 8, 2023

 

 

 

 

 

 

 

 

/s/ JEFFREY A. HOWARD
 

Jeffrey A. Howard
 

President and Chief Executive Officer (principal executive officer)

 

 

Exhibit 31.2

 

CERTIFICATIONS

 

I, William R. McCamey, certify that:

 

1. I have reviewed this Report on Form 10-Q/A of Atlanticus Holdings Corporation;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report; and

 

3. RESERVED.

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the fourth fiscal period in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 8, 2023

 

 

 

 

 

 

 

 

/s/ WILLIAM R. McCAMEY
 

William R. McCamey
 

Chief Financial Officer (principal financial officer)

 

 

Exhibit 32.1

 

CERTIFICATION

 

 

 

The undersigned, as the President and Chief Executive Officer, and as the Chief Financial Officer, respectively, of Atlanticus Holdings Corporation, certify that, to the best of their knowledge and belief, the Quarterly Report on Form 10-Q/A for the period ended March 31, 2023, which accompanies this certification fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of Atlanticus Holdings Corporation at the dates and for the periods indicated. The foregoing certifications are made pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and shall not be relied upon for any other purpose.

 

This 8th day of November, 2023.

 

 

/s/ JEFFREY A. HOWARD
 

Jeffrey A. Howard
 

President and Chief Executive Officer (principal executive officer)
   
 

/s/ WILLIAM R. McCAMEY
 

William R. McCamey
 

Chief Financial Officer (principal financial officer)

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Atlanticus Holdings Corporation and will be retained by Atlanticus Holdings Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 
v3.23.3
Document And Entity Information - shares
 3 Months Ended
Mar. 31, 2023
Apr. 30, 2023
Document Information [Line Items]    
Entity, Registrant Name ATLANTICUS HOLDINGS CORPORATION  
Document, Type 10-Q/A  
Document, Quarterly Report true  
Document, Period End Date Mar. 31, 2023  
Current Fiscal Year End Date --12-31  
Document, Fiscal Period Focus Q1  
Document, Fiscal Year Focus 2023  
Document, Transition Report false  
Entity, Incorporation, State or Country Code GA  
Entity, Tax Identification Number 58-2336689  
Entity, File Number 0-53717  
Entity, Address, Address Line One Five Concourse Parkway, Suite 300  
Entity, Address, City or Town Atlanta  
Entity, Address, State or Province GA  
Entity, Address, Postal Zip Code 30328  
City Area Code 770  
Local Phone Number 828-2000  
Entity, Current Reporting Status Yes  
Entity, Interactive Data, Current Yes  
Entity, Filer Category Accelerated Filer  
Entity, Small Business false  
Entity, Emerging Growth Company false  
Entity, Shell Company false  
Entity, Common Stock Shares, Outstanding   14,464,185
Amendment Description This Amendment No. 1 on Form 10-Q/A (this “Amendment”) amends the original Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 filed by Atlanticus Holdings Corporation (the “Company”, “Atlanticus Holdings Corporation”, “Atlanticus”, “we”, “our”, “ours” and “us”) with the U.S. Securities and Exchange Commission (the “SEC”) on May 9, 2023 (the “Original Form 10-Q”). This Amendment does not change our consolidated financial statements as set forth in the Original Form 10-Q.   The purpose of this Amendment is to amend and restate Part I, Item 4 “Controls and Procedures” to reflect management’s conclusion that our disclosure controls and procedures were not effective at March 31, 2023 due to a material weakness in our internal control over financial reporting identified subsequent to the filing of our Original Form 10-Q. This material weakness did not result in any change to our consolidated financial statements as set forth in the Original Form 10-Q. As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by the Company’s principal executive officer and principal financial officer pursuant to Rule 13a-14(a) are being filed herewith as exhibits to this Amendment (Exhibits 31.1 and 31.2). Because no financial statements are contained within this Amendment, paragraph 3 of such certifications has been omitted. Additionally, a new certification of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350 is being filed herewith as an exhibit to this Amendment (Exhibit 32.1).   Other than the inclusion within this Amendment of new certifications required by management (and related amendment to the exhibit index to reflect the addition of such certifications), this Amendment speaks only as of the date of the Original Form 10-Q and does not modify or update any other disclosures contained in our Original Form 10-Q for other events or information subsequent to the date of the filing of the Original Form 10-Q. Specifically, there are no changes to our consolidated financial statements set forth in the Original Form 10-Q. This Amendment should be read in conjunction with the Original Form 10-Q and reports filed with the SEC subsequent to the Original Form 10-Q.  
Amendment Flag true  
Entity, Central Index Key 0001464343  
CommonStockNoParValuePerShare Custom [Member]    
Document Information [Line Items]    
Title of 12(b) Security Common stock, no par value per share  
Trading Symbol ATLC  
Security Exchange Name NASDAQ  
SeriesBPreferredStockNoParValuePerShare Custom [Member]    
Document Information [Line Items]    
Title of 12(b) Security Series B Preferred Stock, no par value per share  
Trading Symbol ATLCP  
Security Exchange Name NASDAQ  
SeniorNotesDue2026 Custom [Member]    
Document Information [Line Items]    
Title of 12(b) Security Senior Notes due 2026  
Trading Symbol ATLCL  
Security Exchange Name NASDAQ  
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